PayPal No Longer Offering NFT Purchase Protection As Bear Market Claims New Victim

Key Takeaways

• PayPal will no longer offer purchase protection for NFTs.
• Neither will NFT sellers be protected against chargebacks.
• The moves comes as the NFT market has slumped.

PayPal has updated the terms of 2 protection programs so that NFT buyers  and sellers  will no longer be eligible for a refund if they are the victim of fraud.

Previously, NFTs were covered by PayPal’s buyer and seller protection schemes, but with the market currently experiencing high volatility, the payment provider may have decided they are too high-risk to offer refunds.

No Fraud Protection for NFTs

Under the new policy, a buyer who doesn’t receive an NFT they paid for, or a seller who doesn’t receive payment for an NFT, will no longer be able to claim back their losses from PayPal. However, users will still be eligible to claim a refund for unauthorized NFT payments below $10,000.

The policy change puts NFTs in the same category as financial products and investments, which are also not covered by the company’s purchase protection scheme.

CCN reached out to PayPal but the firm did not provide an explanation for its decision.

PayPal NFT Marketplace

In an NFT market that generally favors cryptocurrency payments and automatic order fulfillment powered by smart contracts, PayPal was always going to struggle to make inroads.

However, last year the firm filed a patent  for an off-chain NFT marketplace solution that could make the sector more accessible to traditional payment channels.

Alongside the PYUSD stablecoin, the patent points to PayPal’s ambitious Web3 plans. But with the NFT market currently in the grips of what has now been a 2 year-long bear run, it may have lost some of its allure. 

NFT Prices Sink to New Lows

Although there is some correlation between NFTs and cryptocurrency prices, last month’s bullish crypto market didn’t translate into any real gains for popular NFT collections. And the recent crash has significantly hurt them.

In the last 90 days, the ETH floor price for crypto punks is down more than 30%.

Meanwhile, Bored Ape Yacht Club (BAYC) NFTs are down more than 50% in the same period. Since 2021, the BAYC floor price has collapsed by around 90%.

About the Author

James Morales

Although his background is in crypto and FinTech news, these days, James likes to roam across CCN’s editorial breadth, focusing mostly on digital technology. Having always been fascinated by the latest innovations, he uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.

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