Ask HN: How to minimize transaction costs of conditional pledging?

1 point

16 years ago

I've long though about creating a conditional pledging service, where pledges are contingent on a future outcome (e.g. a minimum number of total pledges, or a minimum total pledge amount). If the condition is met, the pledge becomes due; if not, it's released back to the pledger.

Kickstarter.com does a version of this. It accepts your credit card information, but only charges your card if the condition is met.

Unfortunately, (as far as I know) the major credit card companies set limits on how long you can hold onto that information -- so unless your pledge period is about two months or less, that's not a viable solution.

One other method is to accept the pledged funds up front and put them in an escrow account. If the condition is met, the money gets released to the fundraiser; otherwise, it goes back to the pledger.

Conceivably, this method could have a pledge period of several years. The problem is, you now have to pay one set of transaction costs when you accept the payment, and another if you have to return the payment.

Does anyone have suggestions for how to minimize transaction costs using an escrow-type arrangement?

Alternatively, does anyone have any suggestions for a better solution?

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