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PayPal, according to a barely noticed update to the financial services company’s terms of service, is partially reversing its previous policy by removing protections for buying and selling non-fungible tokens (NFT) transactions. The new policy, effective from May 20, will no longer cover NFT purchase transactions under PayPal’s buyer protection policy.
PayPal’s Move on NFTs
Additionally, the company will no longer back NFT sales exceeding $10,000 with its guarantee against false claims, chargebacks, or other frauds that could cause sellers to lose money. The website shows that PayPal published a notice on March 21 about plans to stop providing protection for some NFT transactions. However, these changes have not been reported until now. PayPal, stated in its announcements:
Effective from May 20, 2024, we are revising our Purchase Protection program to exclude eligibility.
PayPal mentioned the updates on its policy updates page under the “Changes to PayPal’s Purchase Protection Program” section. PayPal also emphasized:
We are revising PayPal’s Seller Protection Program to exclude non-fungible tokens (NFT) transactions of $10,000.01 or more (or the equivalent in local currency at the time of the transaction). Transactions of $10,000.00 or less (or the equivalent value in the local currency at the time of the transaction) will not be covered unless the buyer claims it was an unauthorized transaction and meets all other eligibility conditions.
Removing Assurances for NFTs
Previously, NFT purchases and sales were initially supported by PayPal’s buyer and seller protection programs, but the company later limited the support it provided to token sellers. According to the platform’s website, the old program refunded buyers for products falsely advertised and paid with PayPal, while reimbursing sellers who lost money due to payment disputes and fraudulent refund claims.
In recent years, PayPal has shown subtle signs of increasing interest in blockchain-based cryptocurrencies. Furthermore, in 2022, PayPal launched support for cryptocurrencies on its main platform. That same year, according to a PayPal patent application, the company applied for a patent for an NFT purchase and transfer system that would offer users royalties among other rewards.
