PayPal has quietly implemented changes to its policies surrounding transactions involving non-fungible tokens (NFTs), marking a notable shift from its previous approach. In a subtle update buried within its terms of service, PayPal has announced that it will no longer provide buying and selling protections for NFT-related transactions.
Effective from May 20, the updated policy dictates that purchases involving NFTs will no longer be covered by PayPal's buyer protection program. Furthermore, transactions exceeding $10,000 in NFT sales will no longer benefit from the company's safeguards against false claims, chargebacks, or other fraudulent activities, leaving sellers vulnerable to potential financial losses.
Explaining the decision, a spokesperson for PayPal informed The Block that the complexities and uncertainties inherent in the NFT market, including challenges related to verifying order fulfillment, necessitated this change in policy.
Interestingly, while PayPal had disclosed its intent to withdraw protections for certain NFT transactions as early as March 21, these revisions largely flew under the radar until now.
On its policy updates page, under the "Amendments to PayPal’s Purchase Protection Program" section, PayPal explicitly stated the changes: "Effective May 20, 2024: We are revising PayPal’s Purchase Protection Program to exclude from eligibility: Non-Fungible Tokens (NFTs)."
This adjustment underscores the evolving nature of digital asset markets and the need for platforms to adapt their policies accordingly. As NFTs continue to gain traction and reshape various industries, PayPal's decision reflects the challenges and considerations faced by financial service providers in navigating this dynamic landscape.