Paypal are “in the midst of overhauling” their policies regarding crowdfunding. They’ve received complaints from backers who didn’t understand what their money was going to and, also, the project creators who aren’t able to access the money raised quickly.
While the policies are still being written up, Paypal have already begun to make changes.
“We are now in the midst of overhauling our policies in this space,” writes VP of risk management, Tomer Barel in an open letter on Paypal’s blog. “We’re talking to the major crowdfunding players that we work with to put in place a permanent solution that avoids unnecessary account limitations. But making this work for all stakeholders – contributors, entrepreneurs, crowdfunding sites and us — is pretty complicated. As soon as I have more to share, I promise to update everyone.
“In the meantime, we will ensure that each crowdfunding campaign is reviewed by a senior member of my team before any action is taken. It’s a small, but important step.
“PayPal’s very essence is connecting buyers and sellers. The last thing we want to do is get in the way of the innovative new products coming from entrepreneurs raising money via crowdfunding.”
Lots of Kickstarter campaigns have struggled to bring Paypal donations online till midway through their campaign, limiting the number of pledges they can receive. The news that change is coming will no doubt be a relief to developers. That Paypal are looking to build protections in for backers, too, is good news.