In its recent Terms of Service update, PayPal announced important changes to its buyer and seller protections. Policy NFT (Non-Fungible Token) trading will take effect from May 20th.
Under the new policy, NFT purchases will no longer be covered by PayPal's Buyer Protection program. Additionally, NFT sales exceeding $10,000 are no longer protected from false claims, chargebacks, or other fraudulent activity that could result in financial loss to the seller.
A PayPal spokesperson cited the evolving nature of the NFT industry and uncertainty surrounding proof of order fulfillment as reasons for the policy change.
The company posted a notice about these changes on March 21, but the update has been largely unnoticed so far.
According to PayPal's policy updates page, the revisions to the Purchase Protection Program and Seller Protection Program will take effect on May 20, 2024. The Seller Protection Program excludes NFT transactions over $10,000.01 unless the buyer alleges an unauthorized transaction. Meet all other eligibility requirements.
Previously, PayPal provided buyer and seller protection for NFT transactions through its Buyer Protection program, which provides refunds for fraudulently advertised items, and its Seller Protection program, which provides compensation to sellers affected by payment disputes and fraudulent refund requests.
Despite these changes, PayPal has shown growing 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 included user loyalty provisions.
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