Feeds

Paypal not sure if its bargepole is long enough for crowdfunding

We'll sell you bug-infested rugs or dud lava-lamps, but not another man's dreams

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

Paypal is considering its policy on crowdfund payments after freezing transactions on a number of mob-monetised projects.

The online money-sending service has announced that is looking into how best to move forward with crowdfunding, after admitting that its "existing policies and processes aren’t working quite right for this particular fundraising model".

In a statement, Paypal warned that crowdfunding is based around a model that is "so new, it is potentially open to abuse".

Paypal froze the accounts held by Kickstarter-funded game Dreamfall Chapters, although it later resolved the issue with developer Red Thread Games.

It also froze around $45,000 of payments on an project called MailPile. The payments were later released, along with a Paypal statement which claimed that "crowdsourcing is an exciting new part of our business".

Paypal said that competitors had simply banned mob payments, but it was planning to take a more nuanced approach.

The firm said:

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.

PayPal has a responsibility to ensure that the system remains secure, in compliance with Government regulations around the world, and that consumers who contribute to these campaigns understand where their money is going.

It added:

"When done right, crowdfunding is a powerful catalyst for innovation. However, it's clear that our existing policies and processes aren’t working quite right for this particular fundraising model.

"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. But making this work for all stakeholders – contributors, entrepreneurs, crowdfunding sites and us - is pretty complicated."

Each crowdfunding application will now be looked at by a senior member of the risk management team, which will no doubt slow down transactions enormously. ®

Beginner's guide to SSL certificates

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.