Paypal Gets Into the GoFundMe Game

Illustration for article titled Paypal Gets Into the GoFundMe Game
Photo: Justin Sullivan (Getty Images)

Framing the move as an effort to make giving easier during the rough holiday season ahead of us, PayPal announced on Thursday that it’s launching its own crowdfunding network for charitable giving.

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The Generosity Network allows PayPal users to create or donate to GoFundMe-style fundraising campaigns for people in need. Outside of being directly within the PayPal platform, there isn’t much difference between this service and GoFundMe. The payments provider is encouraging users “who need a helping hand” to start a crowdfunding campaign that can accept donations for up to 30 days and receive a maximum of $20,000. GoFundMe doesn’t place time limits on campaigns and total donations can reach into the millions.

No one should expect PayPal to police the platform for scammers. The company said that funds will be deposited directly from the accounts of donors to those of recipients. For now, the biggest difference between PayPal and GoFundMe is that a donation on GoFundMe comes with a payment processing fee of 2.9% and $0.30 which, ironically, would often go to PayPal. The Generosity Network has no fees “for a limited time,” PayPal said.

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GoFundMe’s business model relies on tips that are suggested after a user contributes to an individual campaign. It seems unlikely that PayPal would have much interest in undercutting crowdfunding competitors in the future, it already has a big piece of the potential profit pie, but stranger things have happened.

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DISCUSSION

I know there is money to be made here, but damn, that is a field of business I’d avoid like the plague. When some white supremacist starts a fundraiser for a white cop that shot a black unarmed man, you will get a lot of bad press and it could tank stock prices.  When people start crowdfunding campaigns for people who never get the money, bad press will follow.

Gofundme is constantly dealing with this kind of stuff.  I don’t know why anyone would invite that level of chaos into their business.