Under fire from crowdsourcing campaigns, PayPal promises ‘overhaul’

PayPal has accepted that it needs a big rethink to deal with the rising popularity of crowdfunding. The payments company has come under fire recently for freezing the funds of high-profile crowdfunding campaigns, and has pledged to rework its policies to better cater to such projects.

In a post announcing the decision, the company somewhat defends its recent actions, noting that, as a new model, crowdfunding “is open to abuse” and PayPal “has a responsibility to ensure the system remains secure.” It says it’s working in conjunction with major crowdfunding organizations to find a permanent solution “that avoids unnecessary account limitations,” but highlights the complexity of “making this work” for “contributors, entrepreneurs, crowdfunding sites, and us.” In the meantime, PayPal says it will now require a “senior team member” to look into each crowdfunding campaign before any account is frozen. “It’s a small, but important step.”