In a recent update to its terms of service, PayPal has announced significant changes to its buyer and seller protection policies for non-fungible token (NFT) transactions, effective May 20.
Under the new policy, NFT purchases will no longer be covered by PayPal’s buyer protection program. Additionally, NFT sales exceeding $10,000 will no longer be safeguarded against false claims, chargebacks, or other fraudulent activities that may result in financial losses for sellers.
A spokesperson for PayPal cited the evolving nature of the NFT industry and the uncertainty surrounding proof of order fulfillment as reasons for the policy change.
While the company published a notice about these changes on March 21, the updates went largely unnoticed until now.
According to PayPal’s policy updates page, the revisions to its Purchase Protection Program and Seller Protection Program will come into effect on May 20, 2024. The Seller Protection Program will exclude NFT transactions with a value of $10,000.01 or above unless the buyer claims an Unauthorized Transaction and meets all other eligibility requirements.
Previously, PayPal provided buyer and seller protections for NFT transactions, with the buyer protection program offering refunds for falsely advertised items, and the seller protection program reimbursing sellers affected by payment disputes and fraudulent refund requests.
Despite these changes, PayPal has demonstrated an increasing interest in blockchain-based digital assets in recent years. In 2022, the company introduced support for cryptocurrencies on its platform and filed a patent application for an NFT purchase and transfer system that includes provisions for user royalties.
Featured Image: Freepik
