Amazon Stops Processing Payments For Crowdfunding Platform For Creative Commons Books

from the weird dept

So this is a bit strange. Unglue.it is a cool crowdfunding platform that focuses on raising money for authors/rightsholders so that they'll release an edition of their books under a Creative Commons license. We've seen a few similar offerings, but Unglue.it seemed really interesting (and to be getting some attention/traction). Basically, they would work with rightsholders, to find out at what price they'd be willing to put their works out under a Creative Commons license, and then try to crowdfund that amount. Neat idea. However, as Jack Allnutt alerts us, despite having already been processing payments for Unglue.it, Amazon has cut the service off, with a bizarre claim about how they don't want to work with any new crowdfunding platforms:
Amazon Payments has informed us that they will no longer process pledge payments for Unglue.it, forcing us to suspend all active ungluing campaigns. According to a Senior Account Manager at Amazon, Amazon has decided against “boarding fresh crowdfunding accounts at this time”. Amazon has been providing payment services for Unglue.it, as it does for the popular crowdfunding site Kickstarter.
Of course, that statement doesn't make much sense, given that it was already processing payments for Unglue.it. In fact, part of this news was that Amazon is requiring Unglue.it to void all payments for existing campaigns (i.e., those not yet funded). So the idea that this is about not "boarding fresh crowdfunding accounts" doesn't make much sense. Amazon has been the only choice for payments on Kickstarter since the beginning, and that seems to have gone well, so it's odd that they're now cutting off others (and, of course, opens up Amazon to wild conspiracy theories). I contacted Amazon to get their side of the story, and they provided the following comment:
We support a wide variety of businesses, but we have regulatory obligations as a licensed money services business for how we operate. Unfortunately, Unglue.it’s model is not the same as some other crowdfunding services and at this time does not allow us to meet those obligations.
That statement makes this all the more... confusing. They're clearly implying that there are regulatory issues preventing them from supporting Unglue.it, though I'm not sure I can think of what the concern here might be. There have been some regulatory issues around equity funding via crowdfunding, but that doesn't seem to be an issue here. If they're just working out deals for licensing books... I'm at a complete loss.

Filed Under: crowdfunding, payment processing
Companies: amazon, kickstarter, unglue.it


Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. identicon
    Anonymous Coward, 9 Aug 2012 @ 11:22pm

    Mike, this is one of those cases where you show that you really aren't involved in business on the internet in any meaningful way. Otherwise, you would know what is going on.

    There are various laws in the US to try to stop things like money laundering and such. As a result, there is the "know your customer" rules regarding payment processors. They need to know who they are actually paying money to (and for that matter, who they are collecting money from). That has all sorts of implications, including requiring W8 or W9 forms regarding payouts to individuals, groups, or companies that might benefit from the payouts.

    If the site isn't very strict about it's payouts (ie, it's unable to provide the processors with end payout users, example), then the processors may not want to deal with them.

    It's not about the product - it's about the methods.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown for basic formatting. (HTML is not supported.)
  • Remember name/email/url (set a cookie)

Follow Techdirt
Techdirt Gear
Shop Now: Copying Is Not Theft
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.