14 DAY TRIAL // There’s been a lot of coverage lately about how PayPal keeps blocking various accounts of crowdfunded projects, raising the ire of many over the Internet.
To PayPal’s defense, as soon as these things were reported, they managed to clarify everything in a matter of hours. The question remains, however, what happens with all those other crowdfunded projects that suffer the same problems but no one writes about.
PayPal’s Tomer Barel, VP or Risk Management, took to a blog post to express the company’s attitude toward the matter.
“Crowdfunding sites are an exciting and innovative new way to directly connect entrepreneurs with the people who want to help them create new products and services. However, there are unique regulatory and risk aspects inherent to this new way to raise money from supporters around the world. To name one, we sometimes hear from campaign contributors that they are confused about what exactly their money is going towards, and assume that they’ll get it back if the venture is not successful,” Barel wrote.
The VP says that while other companies choose to refuse to allow their payment systems to be used for crowdfunding, PayPal considers such campaigns to be a catalyst for innovation.
“However, it's clear that our existing policies and processes aren’t working quite right for this particular fundraising model,” Barel admits, especially since it’s clear the incidents we reported over the past couple of weeks are just misunderstandings and don’t actually pose a threat to anyone.
“We are now in the midst of overhauling our policies in this space. We're talking to the major crowdfunding players that we work with to put in place a permanent solution that avoids unnecessary account limitations,” Barel promises.
This is something that PayPal has already stated on several occasions, but results are coming in slowly so it might take a while until everything is cleared out.