PayPal has released an update referencing the difference between crowdfunding and pre-sales.
PayPal’s Chief Risk Officer, Tomer Barel, stated that,
“Crowdfunding is fundamentally different from regular ecommerce. There is a distinction between crowdfunding and “preselling”. In crowdfunding, the process involves speculatively supporting a new concept that may, despite the best of intentions, not make it to market.
“PayPal has started to engage crowdfunding campaign owners early on to clearly understand their campaign goals and help them ensure their campaigns are compliant with our policies and government regulations. Together with the crowdfunding sites, we identify if campaigns are strictly fundraising or preselling merchandise.
“We enable their campaigns without interrupting payments under the condition that the campaign owner is explicit and transparent to their contributors that there is no guarantee of delivery regarding the rewards being offered upon contribution.”
You can also go here to find out more about how to run a successful crowdfunding campaign.
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