Technology trends that are changing the future of crowdfunding

With the evolution of technology and the internet, it has become easier for people to raise funds in no time. India is the second largest online market with over 460 million internet users, which is estimated to touch 635.8 million by 2021.

Mayukh Choudhury Aug 27th 2018
Mayukh-Choudhury-Co-Founder-CEO-Milaap.jpg

Crowdfunding, as a concept is not at all new to India. It has existed for ages now in some form or the other. Today, in the digital age, it has only become more organized and democratized, evolving into an alternative form of financing, in the face of tough situations.

With the evolution of technology and the internet, it has become easier for people to raise funds in no time. Despite being a developing country, India is the second largest online market with over 460 million internet users, which is estimated to touch 635.8 million by 2021. Almost anyone can seek or offer help, as internet connectivity reaches remote pockets, assisted by the popularity of messengers, and adoption of mobile payments.

Mobile fundraising

India is among the fastest growing smartphone markets in the world and Indians spend more time online on their mobile phones than on computers. According to a survey, Indians spent 89 percent of their online time on mobile phone in 2017. Most crowdfunding platforms today have mobile friendly websites to take their services to a larger audience, enabling people to set up appeals through a medium of their comfort, and share it with the world in a single tap, thanks to social media and instant messengers.

With the world in one’s pocket, and all communication happening on the go, there is also the option to donate on-the-go. You don’t even need to open your laptop to extend any amount in financial aid to an ailing friend.

Online Payments and Payment Gateways

People are used to paying online for almost everything today, from ordering food to booking hotels. In fact, today many prefer paying through online wallets even at regular stores, because it is much easier and takes away the hassles of carrying or waiting for exact change.
It is no different when making a contribution to a cause you care about. People want their participation to count immediately. This is more prominent in emergency situations like natural disasters. Reports imply that around 50 million people are affected by natural disasters every year. People always come forward and participate in providing relief in the face of such calamities.

Today, with the credible avenue provided by prominent crowdfunding platforms, digital donation via payment gateways is faster and easy to accept. For the recent Kerala flood relief fund, Paytm managed to raise Rs 30 crore from 12 lakh users within just four days.

For an effective online funding experience, it is very important to integrate trusted payment gateways. Choosing a secure payment gateway is very essential as payments are the life source of any crowdfunding campaign. Also, partnering with a payment facilitator could be of a great help. It shoulders many burdens, like checking the validity of donations (particularly for foreign donations), stolen credit card payments, and settlement or fund withdrawal procedures. Speed is the key, because most people need their funds as soon as possible. Through most payment gateways today, there is no set limit on the donation amount. With a variety of modes provided by the different gateways people can contribute any amount, from any part of the world, depending on their convenience.

With the upgradation and experimentation of technology, mobile phones, chatbots and Payment Gateways will change the face of Indian crowdfunding market. Changes will not only be on the platform but all forms of communications.

Language

A common language is often crucial to the creation of an identity when it comes to building communities. Communities are crucial in crowdfunding, where a need must resonate with people in a group to receive support. So far, the virtual world has been dominated by English, but we are now slowly seeing how different languages are being integrated on the web. From your browser, to your social media posts, today anything can be typed out and shared in any language of your choice.

For a developing country like India, with so many languages, and strong diasporic communities in various parts of the world, the language builds a strong emotional connect. Even so far, the language media has been extremely crucial in communicating urgent needs to groups where they matter. But now, we are seeing people do the same through social media as well, channelizing support from strong online communities who stay connected for such purposes.

Social media and IM

Social media and crowdfunding go hand in hand. For any need to gain support from people, it is essential to maximize its reach. Social media makes this possible by enabling people to take a message to thousands of people with one click. Every social media platform has groups where people discuss common interests, ideas and concerns. A large part of the success of your fundraiser depends on taking your need to the right group.

Reports suggest that Whatsapp is installed in 90% of smartphones in India. That makes instant messaging a very accessible choice. Such messengers make it extremely easy to share a cause with a closer circle, and explain the need better. Instant messaging often gives important messages the much required push, and makes it easier to talk about it, get in touch and render help. Direct messages also help donors feel a personal connect with the cause or the person in need, rather than mass emails.

Chatbot

A chatbot is a computer program or AI-driven conversation through auditory or text methods. Over 100,000 chatbots have been created since the time Facebook launched its messenger app, which enabled the users to communicate faster, and get in touch with people personally.
 
According to the 2016 Email Marketing Metrics Benchmark Study, 21.8% was the average email open rates in the world which reflects that around 78% of users don’t take any interest in opening emails shared by companies. One of the reasons can be the high frequency of spam messages that users receive daily. According to the survey, every month, on an average, around 1.3 million people use facebook messenger and it is growing everyday, thus increasing the possibility to reach a very large number of users. Many industries have been benefited from the emergence of chatbots, and crowdfunding is no different.
 
For an online fundraising platform, there are many challenges in making digital crowdfunding as popular as it is.  Despite the convenience and ease it brings about, we must remember that people setting up fundraisers are mostly in pressing need of crucial medical treatment or life-saving procedures for their loved ones. In such circumstances, filling another form to set up an appeal might not be the best idea. Moreover, it might be very difficult for many people to share sensitive, personal needs in detail with people. Chatbots, make the approach more conversational.  There is also a conversation history where people can go back and check if they missed anything.
 
So far, no other Indian crowdfunding platform has integrated messenger bots in the process of setting up a fundraiser, but that may be a good way forward. This is indeed a big step towards the future, where people can share their genuine causes with the world, over a simple conversation.
 
The Indian crowdfunding industry is growing rapidly, and the concept is gaining more acceptance. Any advancement in technology will directly reflect in the crowdfunding space, because it is still in the stages of early development. There is still vast scope for the concept to grow and reach more people, who may need it more than anyone else.

Mayukh Choudhury is CEO & Co-founder, Milaap.

Disclaimer: This article is published as part of the IDG Contributor Network. The views expressed in this article are solely those of the contributing authors and not of IDG Media and its editor(s).