Online crowdsourced funding is becoming a fast cornerstone of technological innovation. PayPal, which has stamped down on crowdsourced funding in the past, has now overhauled its policies to be somewhat more sensible.
PayPal is often criticized an online payments platform which comes with too many restrictions and regulations. While some of them are a must for every digital payments solution, PayPal has been criticized for freezing funds on the slightest whim and causing huge inconvenience to its customers.
The company did the same with some projects trying to raise crowdsourced funding through PayPal in the past. However, after a huge dose of backlash and criticism, PayPal has come around and announced that it is overhauling its policies to be more friendly towards crowdfunding projects. The company has apparently been working with leading crowdfunding platforms and sites to devise a safe way of supporting projects hosted on them.
The key contention that the company has is simply that certain crowdfunding projects don’t make it to fruition at their promised time or in some cases, at all. This means that the money of the users backing it is at risk. So while PayPal now supports crowdfunding, it requires projects to show a disclaimer on their campaign pages citing that there are no guarantees about the final product and that backers may get nothing at the end or at least on the promised date.
This will sting the crowdfunding projects but it is fast becoming somewhat of a necessary evil. However, PayPal has also imposed the requirement that the owners of crowdfunding projects need to submit personal or financial info as well as government-issued IDs to be supported by the online payments giant. This latter part is somewhat of an intrusion, since there haven’t exactly been many ‘heists’ on sites such as KickStarter since their inception.
Nonetheless, this is good news for crowdfunding projects, even when PayPal is playing safe. In the long run, the company may make its policies more flexible and more accommodating but in the interim, at least we no longer have to worry about frozen funds and other such nuisances.
Source: PayPal
Courtesy: Engadget
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