PayPal to remove purchase protection for crowdfunding supporters

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It is a well known fact that crowdfunded projects often fail to deliver on their promises. While the percentages of failed projects was much bigger in the past, due to relaxed rules for submitted projects, a recent study shows that nowadays nine percent of crowdfunding KickStarter’s projects fail and as such don’t deliver the promised rewards for its supporters.

PayPal currently treats crowdfunding and “preselling” more or less differently. This is despite the fact that crowdfunding projects often function as pre-orders. With this change in policy the company wants to clear up some of the confusion that has surrounded its support for crowdfunding platforms in the past. And the easiest solution to do this is to stop providing purchase protection for customers that find a project fails to deliver the promised product, delivers a broken one or is fraudulent from the very start. While PayPal did not officially explain their decision it is most likely a way for it to avoid assuming any risk that comes with crowdfunding projects.

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