Revised NFT Protection Policy by PayPal for Buyers and Sellers
PayPal Revises NFT Protection Policies
PayPal has announced changes to its buyer and seller protection policies for non-fungible token (NFT) purchases and sales, effective from May 20, 2024. These changes do not affect the protection policies for regular transactions initiated through PayPal's traditional payment methods.
The new amendments exclude NFT transactions exceeding $10,000 from eligibility under the Purchase Protection Program. This means that transactions equal to or below $10,000 will still be protected if the buyer claims it was an Unauthorised Transaction and meets all other eligibility requirements.
The changes were made due to uncertainty around proof of order fulfilment and other variables. PayPal's digital art segment has not kept pace with other verticals, such as the PYUSD stablecoin and support for traditional crypto transactions.
The seller protection program has also been amended to exclude NFT transactions exceeding $10,000. Transactions exceeding this amount are also excluded from protection against false claims and chargebacks.
PayPal's policy update regarding NFT transactions was announced following a notice published on March 21, stating that some NFT transactions would no longer be protected. This decision comes as the crypto market, in general, experiences a resurgence from multiple fronts, including cryptocurrency prices, Web3 funding, and the demand for new asset classes like tokenized real-world assets and crypto restaking.
It is worth noting that the changes apply to payments initiated via a third-party platform using PayPal's Direct Debit functionality. The changes do not affect the buyer and seller protection policies for regular transactions.
In other news, PayPal has filed a patent application for an NFT marketplace with the USOPT, indicating its continued interest in the digital art market. The company's digital asset strategy has been growing, with the launch of its PYUSD stablecoin and support for traditional crypto transactions.
These changes in PayPal's NFT protection policies are part of the company's ongoing efforts to navigate the complex and rapidly evolving digital asset landscape. As always, buyers and sellers are encouraged to carefully review PayPal's policies and terms of service to ensure a smooth and secure transaction experience.
