PayPal is the most secure and fast platform to transfer money online. PayPal strives to give its customers best protection. PayPal provides Purchase protection to its clients on every transaction. In this way, PayPal makes an online money transfer more secure. Purchase Protection ensures that the sellers are not charged for payments sent from a hacked account or even on items that customers say did not arrive.
PayPal is going to change its Purchase Protection policy a little bit. It is going to end the Purchase Protection for Crowdfunding platforms. This means that PayPal will not refund anything if you make payments to Crowdfunding projects. The PayPal customers will not be able to enjoy the benefit of refund in case the product is not delivered or is broken. This new policy change will take effect on June 25th. After June 25th, if you make payments to crowdfunding projects, you’ll do it at your risk, and you will not be able to dispute with PayPal about any unsatisfactory result.
Sources claim that the reason behind this can be the documentary of KickStarter which shows that 9% of all its Crowdfunding projects failed to deliver the rewards. PayPal does not want to create trust problem, and therefore, not telling why it is changing its purchase protection. That is why the real reason behind the modification is still unknown.
On this occasion, the company said, “In Australia, Brazil, Canada, Japan, United States and certain other countries, we have excluded payments made to crowdfunding campaigns from our buyer protection programmes. This is consistent with the risks and uncertainties involved in contributing to crowdfunding campaigns, which do not guarantee a return on the investment made in these types of campaigns. We work with our crowdfunding platform partners to encourage fundraisers to communicate the risks involved in investing in their campaign to donors.”
This statement clearly shows that it is clear that the company finds it risky to protect crowdfunding projects. The main reason behind this risk fear can be the KickStarter’s statement. The statement creates uncertainties about the crowdfunding projects and in turn increase risk for the company.
Moreover, the company will also withdraw protection against transactions like Gambling and payments made to Government agencies. The company said that there are many risks involved in these transactions and therefore, these transactions are not eligible for Purchase Protection.
We advise PayPal customers not to transfer money to crowdfunding projects. Otherwise, you can lose the money.