PayPal has revised its merchant-focused vendor protection program. To consider transactions over $ 10,000, including NFT tokens. Based on these changes to the guidelines, which were updated on February 11. They will run until March 21.

These new guidelines oversee the PayPal Merchant Protection Program for expanding the list of inappropriate items to include NFT tokens. With a value of over US $ 10,000 per transaction. But a separate document that describes the complete revised vendor protection program agreement.

Has stated that among the items that are not eligible for protection. It can be media, antiques, or collectibles, either physically or digitally, provided by a unique (NFT) token. Cited. Carrying out these transactions with a transaction amount of more than US $ 10,000 or its equivalent in local currency is calculated at the transaction time.

Limiting NFT Transactions

According to PayPal’s Policy Updates page, NFT transactions valued at more than $10,000 are ineligible. The changes will come into effect from March 21 this year.

A document further elaborating stated that items or transactions such as art, media, antiques, or collectibles, physically or digitally, as represented by an NFT worth more than $10,000 or equivalent value in local currency, as calculated at the time of the transaction, will not be eligible for its Seller Protection Program.

PayPal first announced enabling users in the US to buy Bitcoin and other cryptocurrencies in October 2020. The following year, the payment processor started allowing users to spend their cryptocurrency holdings, such as Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC), at millions of online merchants across the world.

The policy will become effective on March 21, according to a policy update dated February 11. The page highlights “[r]evising PayPal’s Seller Protection program to expand the list of ineligible items to include certain Non-Fungible Tokens (NFTs) with a transaction amount of more than $10,000 USD.”

A separate document outlining the full amended Seller Protection program agreement states that among the items ineligible for protection are “[a]rt, media, antiques, or collectibles, in physical or digital form, as represented by a Non-Fungible Token (NFT), with a transaction amount of more than $10,000 USD or equivalent value in local currency as calculated at the time of the transaction.”

PayPal’s Seller Protection program is aimed at providing merchants who use the payment service with some protections against chargebacks and other disputes. 

PayPal went live with crypto support via its main platform as well as Venmo last year, after announcing the initiative in October 2020 in partnership with industry startup Paxos. PayPal is also exploring the potential launch of a stablecoin, as The Block first reported. 

The revision of seller protection norms come at a time when tax authorities in the U.K. seized NFTs linked to an alleged $1.8 million NFT fraud case. With increasing NFT scams, several sites have cautioned consumers to check if they are legit.

The U.S. Treasury also revealed that the burgeoning NFTs can be used for money laundering.

Some of the common NFT scams are fake minting, deadlinks, and discord hacks, where fraudsters gain administrator-level access to a discord server and post a fake minting link.

“Having a system that is managed with professional validators makes it feasible to fully protect consumers from NFT frauds,” Tom Anderson, CEO Devv.io, a blockchain and NFT security company, told FXEmpire.

PayPal’s move restricting NFT transactions that are beyond $10,000, not only prevents buyers from losing money in a lump in case of fraud but also helps cut scammers. 

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