If you’re one of the few who relies on Paypal to pledge for crowdfunding projects, we have some bad news for you. Starting on the 25th of June, Paypal will be discontinuing the Purchase Protection coverage for all crowdfunding projects.
Currently, those who pledge to failed crowdfunding projects are able to dispute the charge, giving them a chance to recoup their money in the event of a crowdfunding project going south. Come the 25th of June, all those who pledge to crowdfunding projects will no longer be able to do that, meaning that should the project fail, those who backed it through Paypal will not be able to dispute the charges, and as such, will not be able to gain a single cent back. It’s interesting to note though that this change would not affect Kickstarter as payments made to that website was never protected by Paypal.
With the history that surrounds crowdfunding projects, it isn’t exactly surprising as to why Paypal has decided to pull its Purchase Protection coverage from all crowdfunding platforms. While Paypal themselves have yet to issue a statement as to why they’ve decided to stop protecting transactions to crowdfunding platforms, its probably safe to say that the company isn’t interested in dealing with all the complications that a crowdfunding project may have.
Source: The Verge
