PayPal has said it will do better in the future when it comes to releasing monies earned from crowdfunding.
Speaking in an open letter on the company’s official website, PayPal’s VP of risk management Tomer Barel said the company is currently looking over policies which pertain to crowdfunding campaigns such as IndieGoGo and Kickstarter.
“Because the model is so new, it is potentially open to abuse [and] 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,” he wrote.
“Some of PayPal’s competitors solve this by simply refusing to allow their payment systems to be used at all for crowdfunding. We don’t believe that’s the right approach because, 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.
“As soon as I have more to share, I promise to update everyone.”
Barel said that in the meantime, the firm will ensure that each crowdfunding campaign is “reviewed by a senior member” of his team before any action is taken as the thing the company wants is to “get in the way of the innovative new products coming from entrepreneurs raising money via crowdfunding.”
“We’re making changes every day to get this right,” he concluded.
PayPal and Nyu Media recently resolved issues surrounding the release of funds gained through the Indigogo campaign for Yatagarasu Attack on Cataclysm.