PayPal removes purchase protection for crowdfunding campaigns

The crowdfunding gamble has just got a little riskier with news that online payment giant PayPal will no longer offer payment protection on money pledged to crowdfunding campaigns.

PayPal’s customer protection is typically pretty robust and has for some been seen as a much-needed failsafe should a Kickstarter go belly-up, as can sometimes be the way.

However, as part of its latest policy update, PayPal has added crowdfunding to its list of ineligible items.

In Australia, Brazil, Canada, Japan, United States and certain other countries, we have excluded payments made to crowdfunding campaigns from our buyer protection programs,” the company said in a statement. This is consistent with the risks and uncertainties involved in contributing to crowdfunding campaigns, which do not guarantee a return for 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.”

The new rules come into force on June 25th. It has not been confirmed whether the UK is among the unspecified countries, but it is presumed so.