PayPal is changing its policy, detailing in a recent update a new measure regarding customers backing crowdfunding projects. To that end, as of 25 June this year, payments made on crowdfunding websites will be ineligible for protection, more specifically, the coverage normally afforded in its Purchase Protection. 

PayPal has stated that it will no longer provide refunds for customers that use crowdfunding platforms, should the project fail to be fully funded, deliver a faulty product or turns out to be completely fraudulent.  

This move has risen from the controversy surrounding crowdfunding projects' ability to deliver. Recently, we reported that an estimated 9% of projects on Kickstarter failed to deliver to backers. 

While not citing Kickstarter specifically, there has been confusion between the PayPal platform and customers when requesting a refund for failed projects, according to the company. One such example is the Zano drone, which is still under investigation for an estimated $35 million loss in backer-funded payments.