PayPal is one of those payment companies that everyone in the world has heard of. Whether that personal experience was good or bad is a topic for another debate. Though the company has an appetite for growth, one could argue that they want to centralize different types of payments under one umbrella. Not too long ago the company was considering buying GoFundMe, albeit that has not yet happened.
What Role Could PayPal Play in Crowdfunding?
The name GoFundMe is a big name in the crowdfunding industry. In fact, it is also one of the most popular platforms so far, since it is not your average reward-backed service. Rather than dealing with gadgets and gizmos trying to reach production funding, GoFundMe is a platform for companies and individuals who reward users either with a company take or minor tangible rewards.
Over the years GoFundMe has managed to get the attention of quite a few financial players (including PayPal) so much so that it seemed the payment processor would try to purchase the crowdfunding platform for the price of over US$1bn. For now, though, it seems that those plans have been put on ice indefinitely.
The bigger question is what a company such as PayPal would want with a crowdfunding platform in the first place. When backing a GoFundMe project, users have plenty of payment options at their disposal. Adding PayPal to that list would be convenient, although it could be seen as a violation of their own terms of service.
An acquisition of GoFundMe by PayPal, however, would make little to no sense. Keeping in mind how the payment processor is no longer offering Purchase Protection for payments made through crowdfunding platforms, users would have zero protection. So far the “marriage” between PayPal and crowdfunding sites has not been a happy one, to say the least.
The biggest problem is dealing with chargebacks and fraudulent transactions. With PayPal that is certainly possible to achieve, but it is also a major risk for anyone accepting those payments. An extensive list of chargebacks will lead to accounts being investigated and, in some cases, frozen for up to 180 days–not something to look forward to by any means.
Moreover, GoFundMe removed the PayPal payment option some time ago as well, as the company felt that they did not have enough control over the payment process itself. Although the acquisition plans seem to be on hold for now, this will not be the last time we shall hear both companies being mentioned in the same breath.
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