PayPal is quietly removing buy and sell protections for non-fungible token (NFT)-related transactions, in a partial reversal of its previous policy, according to the company’s little-noticed terms of service update. business.
Under the new policy, starting May 20, NFT purchases will no longer be covered by PayPal’s buyer protection policy. Additionally, NFT sales worth more than $10,000 will no longer be covered by the company’s guarantee against false claims, chargebacks, or other scams that could cause sellers to lose money.
“Given the uncertainty around proof of order fulfillment and other variables in this evolving industry, we are no longer offering buyer protections and limiting seller protections for NFTs,” said a PayPal spokesperson told The Block.
The company issued a notice of its intention to stop providing protections for certain NFT-related transactions on March 21, its website says. But so far these changes have not been reported.
“Effective May 20, 2024: We are revising PayPal’s Purchase Protection Program to exclude from eligibility: non-fungible tokens (NFTs),” PayPal said on its policy updates page under the section “Changes to PayPal’s Purchase Protection Program”.
In its “PayPal Seller Protection Program Changes,” PayPal stated:
As of May 20, 2024:
- We are revising the PayPal Seller Protection Program to exclude from eligibility non-fungible tokens (NFTs) with a transaction amount of:
- $10,000.01 USD or more (or equivalent local currency value as calculated at the time of transaction);
- $10,000.00 USD or less (or local currency equivalent value as calculated at the time of the transaction), unless the buyer claims that it was an unauthorized transaction and the transaction meets meet all other eligibility conditions.
PayPal did not immediately respond to The Block’s request for comment.
Previously, purchases and sales of NFTs were initially supported by PayPal’s buyer and seller protection programs, although the company later limited its support to token sellers. The first program reimbursed buyers for items falsely advertised and paid for with PayPal, while the second reimbursed sellers who lost money due to payment disputes and fraudulent refund requests. according to on the platform’s website.
In recent years, PayPal has shown subtle signs of its growing interest in digital art and blockchain-based digital assets. In 2022, PayPal deployment of support for cryptocurrencies on its main platform. The same year, the company also filed a patent for an NFT purchase and transfer system that would provide users with royalties, among other rewards, as shown in a PayPal patent application.
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