PayPal to stop offering consumer protection for NFT transactions

PayPal will be updating its policy regarding NFT transactions, where buyers of NFTs will no longer be covered by the buyer protection program, and sellers of NFTs will also not be covered by the company's protection. These changes will take effect on 5/20.

PayPal Removes Protection for NFT Transactions

According to a new policy quietly updated by PayPal last month, users buying and selling NFTs using PayPal will no longer be covered by the company's protection program, set to take effect on 5/20.

Buyers of NFTs will not fall under the company's Purchase Protection Program, and sellers of NFTs will not be protected under the Seller Protection Program, with exceptions for amounts under $10,000.

This move essentially means that PayPal will not assume any risks related to NFT transactions in the future, in response to the ongoing issues of high fraud, financial risks, and uncertainties associated with NFTs, reducing the company's operational risks.

PayPal Continues to Drive the Development of the Crypto Industry

Compared to other traditional companies, PayPal has been actively involved in the crypto space, including launching its own stablecoin PYUSD, supporting crypto payments, and collaborating with various crypto exchanges and payment providers, indicating the company's expectations for this industry.

Although this event may seem like PayPal is reducing its support for NFT development, it might actually be the opposite. After the policy takes effect, PayPal may be able to try new business models without as many concerns.