Paypal to pull payment protection for crowdfunding

[CaptainGazzz]

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There are numerous tales of failed crowdfunding projects that spirited away hundreds of thousands of dollars of backer funds. In those instances payment protection would at least give backers the option to dispute the charge. Of course, PayPal can’t recover money from failed crowdfunding projects, leaving the payment site awkwardly in the middle. But not any more. 

While the change will likely be unpopular, it does serve as a reality-check for just how risky crowdfunding can be. In order to avoid being disappointed (or burnt) in future, it’s best to pledge based on faith in an idea, not on an expectation of receiving a finished product.

I can understand why Paypal did this, crowdfunds are a risky investment and since you aren't promised a product, Paypal shouldn't try to refund it in the first place. It would be a waste of resources and would be inconvenient to the customers who were actually scammed and want to get a refund. As the article stated: "This is an inherent – but often overlooked – part of crowdfunding: you invest money in a project, not a product. So if the project fails, you can easily lose your money.". I couldn't agree more. That's why I don't invest big sums of money into Kickstarter, I would rather have a 100% guarantee that I get the product by buying it when its released. 

 

Source: http://www.androidauthority.com/paypal-payment-protection-crowdfunding-691452/

 

Do you invest in crowdfunding, and do you think that Paypal's decision is reasonable?

[CaptainGazzz]

19 minutes ago, Mantayd17 said:

I agree, one should really spend his money wisely. You can't pretend to offload the risk of what you're crowdfunding on your payment method, in this case PayPal.

I agree. 

Moreover, it doesn't actually work, people think they can refund it, but it isn't possible most of the times.

[SansVarnic]

I agree with this move, Investing is always a risky move. Any investor rep worth their salt would tell you that Paypal should have made this move long ago.

Stock exchanges do not refund money lost. 

[theninja35]

7 minutes ago, SansVarnic said:

Stock exchanges do not refund money lost. 

Let's make that a thing.