The PayPal payment giant (PayPal shares - PYPL ticket) excluded NFT transactions above $ 10.000, starting March 21.
For a revised Seller Protection Program, PayPal has exposed its changes, which affect Non-Fungible Tokens (NFTs). It stated that objects represented by NFT, including art, collectibles and both physical and digital media that are more than $ 10.000 in transaction amount are ineligible under the program.
The merchant-focused program aims to protect online sales transactions from chargebacks, chargebacks and fraud. Seller protection applies if a transaction is canceled due to a successful chargeback from a buyer.
The new rule follows a series of cases of NFT thefts and scams that have recently emerged. Many NFT buyers think there could be previous cases of NFT fraud on the payment platform, which led to this amendment.
As the craze for NFTs increases, scams also increase
The revised seller protection rules come at a time when UK tax authorities have seized NFTs linked to an alleged $ 1,8 million NFT fraud case. With the rise of NFT scams, several sites have warned consumers to check if they are legal.
The US Treasury also revealed that burgeoning NFTs can be used for money laundering.
Some of the common NFT scams are fake minting, deadlinks, and discord hacks, where scammers gain admin-level access to a discord server and post a fake mint link.
“Having a managed system with professional validators makes it possible to fully protect consumers from NFT fraud,” Tom Anderson, CEO of Devv.io, a blockchain and NFT security firm, told FXEmpire.
PayPal's move to restrict NFT transactions that are over $ 10.000 not only prevents shoppers from losing money in one fell swoop in case of fraud, but also helps cut out scammers.
PayPal's pro-crypto moves
PayPal was one of the first to adopt in the cryptocurrency space. The payments platform has announced the inclusion of cryptocurrencies such as Bitcoin and Ethereum for purchases.
The new crypto-friendly feature has allowed US PayPal account holders to hold and shop with cryptocurrencies at its 26 million merchants. The California-based firm also extended the service to its peer-to-peer payment app - Venmo in 2021.
This means that customers can buy and sell Bitcoin and other digital assets like Bitcoin Cash (BCH) and Litecoin (LTC) and convert them to real-world currencies to pay for items during checkout.
Additionally, PayPal and Venmo have allowed their users who dabble in cryptocurrencies to move their digital coins to third-party wallets such as Coinbase.
Earlier this year, PayPal announced plans to launch its own stablecoin dubbed 'PayPal Coin' backed by the US dollar. The firm also formed an advisory board for cryptocurrencies and blockchains, involving six individual industry experts.
