September hasn't been a great month for PayPal. The global payment processing giant first froze $45,000 of crowd-contributed funding for secure mail server Mailpile, then released the funds in the face of a great deal of media pressure. When Ars spoke to PayPal about the freeze, the company representative quickly noted that PayPal is a fan of crowdfunding and that the company's response to Mailpile's freeze—demanding the Iceland-based company provide PayPal with "an itemized budget" and "developmental goal dates," presumably to prove it's a real company—was not the optimal way to proceed when vetting a crowdfunding campaign. PayPal informed Ars that its new president has voiced his support for crowdfunding and committed to ensuring that PayPal's review processes don't stand in the way of crowdfunding campaigns.

Unfortunately, those words rang a little hollow when just days later, PayPal proceeded to freeze two more high-profile crowdfunding campaigns. The first was a fighting game called Yatagarasu Attack on Cataclysm, with $118,243 raised on a $68,000 goal. The game has an impeccable pedigree, employing three King of Fighters design veterans; nonetheless, PayPal limited the project's account so that it could not withdraw funds. PayPal's customer service team reportedly told the Yatagarasu AoC developers that PayPal would keep up to half of their crowdfunded dollars frozen until after the game's release—a death sentence for a game relying on crowdfunding for its development. Complaints about the freeze quickly picked up steam, and according to the developers, PayPal's executive escalation team stepped in and unfroze the funds.

Not even a day later, another, far larger project found itself in the same situation: Dreamfall Chapters: The Longest Journey by developer Red Thread Games fell under PayPal's baleful gaze. Dreamfall Chapters had raised over $1.5 million on Kickstarter, and the majority of those funds did not come via PayPal, but PayPal still froze the dollars it had processed. Once again, there was a surge of Internet outrage, and once again, PayPal quickly un-froze the funds and apologized.

PayPal is a large company, and policy changes take time to trickle down from the top in an organization its size, but process failures here on PayPal's part are pretty staggering. The good news is that PayPal seems to realize the scope of the problem—or, at least, PayPal is very loudly saying it does. In response to this week's multiple crowdfunding screwups, PayPal VP of Risk Management Tomer Barel posted an entry on PayPal's blog promising sweeping changes are afoot:

We are now in the midst of overhauling our policies in this space. We're talking to the major crowdfunding players that we work with to put in place a permanent solution that avoids unnecessary account limitations. But making this work for all stakeholders—contributors, entrepreneurs, crowdfunding sites and us—is pretty complicated. As soon as I have more to share, I promise to update everyone. In the meantime, we will ensure that each crowdfunding campaign is reviewed by a senior member of my team before any action is taken. It’s a small, but important step.

The promise of direct, non-automated, high-level review by a "senior member" of the PayPal Risk Management team is a good thing; indeed, the blog post went live on September 11, and two days have passed without another high-profile crowdfunding freeze occurring.

Even more important, though, is the closing line in the message. The previous frozen crowdfunding campaigns found themselves stymied by PayPal's customer service and unable to reach anyone else inside of PayPal to assist and were forced to turn to the media to gain attention. To address this, Barel ends the blog post by extending an olive branch: his e-mail address.

We're making changes every day to get this right, but if anyone is having an outstanding issue with PayPal for a crowdfunding effort, here is my direct email: tbarel@PayPal.com.

The challenge PayPal faces is clearly a difficult one; when we spoke with PayPal's Anuj Nayar last week, he emphasized that the company's primary goal is to comply with a complex skein of international financial regulations and protect customers' money from fraud, and that crowdfunding sometimes gets caught in the nets intended to prevent illegal activity. "The problem with crowdfunding is that sometimes it hits triggers," Nayar said, "where we haven't worked out what the triggers for good or bad are."

We're hopeful that Barel's direct intervention into what's clearly a broken crowdfunding review process will result in actual change; putting a personal set of empowered executive eyes on what might otherwise be a frozen legitimate crowdfunding campaign ought to smooth things out. However, personal executive review isn't a permanent workable solution, and the larger question to be answered is if this will be a temporary patch on the problem, or the start of an actual fix. We'll be keeping an eye out for crowdfunding projects that slip through the cracks.