PayPal Amends SPP
Since October 2020 PayPal users have had the ability to buy Cryptocurrencies. We’ve seen rapid growth in the cryptocurrency space, as well as an increase in digital NFT purchases. It seems it was only a matter of time before PayPal had to step in to make changes for its users.
Updated Seller Protection Program
On February 11th PayPal has revised its Seller Protection Program, stating,
“Revising 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.”
This new policy update will go into effect on March 21st, 2022 according to the document. So what exactly does this mean for users? The goal of the Seller Protection Policy, as stated in the most recent PayPal document,
“PayPal’s Seller Protection program may apply when a buyer claims that:
- They did not authorize, or benefit from, funds sent from their PayPal account (referred to as an “Unauthorized Transaction” claim), and the Unauthorized Transaction occurs in an environment hosted by Paypal; or
- They didn’t receive the item from you (referred to as an “Item Not Received” claim).
PayPal’s Seller Protection program may also apply when a transaction is reversed because of a successful chargeback by a buyer or when a bank funded payment is reversed by the buyer’s bank”.
Reason for the Policy Update
Some PayPal users believe that as the NFT frenzy increases, the fraud has as well, which may be a reason for the updated policy. In the United Kingdom we recently saw that chief tax authority seized NFTS in a $1.8 million fraud investigation. This a good reminder that while we’ve seen NFT sales hit all-time highs, that the space is still susceptible to scams, fraud and theft.
As always, it’s important to keep up with the policies in place to make sure you’re always protected, especially with high ticket purchases. For users using PayPal to purchase Non-fungible tokens, keep in mind that ineligible items and transactions for the seller protection program include, Art, 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. So, in the case that a transaction goes south, PayPal may not be able to take the fall for the financial loss.