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New Paypal Rules Aimed to Screw Indian Users More than Ever Before

29 Jan, 2011 by
News

paypal-india

Paypal, the biggest e-commerce business for payments and money transfers on the internet has been making buzz in India for all the wrong reasons. And it just got worse than ever before.

Here is a transcript of the mail we just got now


With effect from 1 March 2011, you are required to comply with the requirements set out in the notification of the Reserve Bank of India governing the processing and settlement of export-related receipts facilitated by online payment gateways (“RBI Guidelines”).

In order to comply with the RBI Guidelines, our user agreement in India will be amended for the following services as follows:

  1. Any balance in and all future payments into your PayPal account may not be used to buy goods or services and must be transferred to your bank account in India within 7 days from the receipt of confirmation from the buyer in respect of the goods or services; and
  2. Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction.

Twitter as always was the first to react with tweeps all over India and even those staying abroad, expressing their displeasure about the way Paypal and RBI are treating their customers. Paypal on its part has tried its best to shift all the blame on RBI and its stringent guidelines, but it really beats me, as to why RBI is targeting Paypal alone.

Paypal has a forgettable history in India, specially the recent past, which has been marred with one controversy or the other.

Paypal’s FAQ has some answers, which are not convincing enough. Paypal says that no one can receive an amount greater than $500 for any goods or service and the reason they give is “to ensure that we continue to comply with the RBI Guidelines.”

Things get worse if you run a e-commerce site in India with Paypal as a payment option. Why? A couple of reasons

  • Your Customers won’t be able to complete their checkout with their PayPal account balance unless they link a credit card to their account in before sending you money
  • You won’t be able to receive any transaction greater than $500

So, for now, Paypal in India is as good as DEAD. RIP Paypal India.

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Raju is the founder-editor of Technically Personal. A proud geek and an Internet freak, who is also a social networking enthusiast. You can follow him on Facebook and on Twitter. Mail Raju PP.
  • http://www.priteshgupta.com/ Pritesh Gupta
  • http://www.ampercent.com Soumen Halder

    How long are we going to be dictated? Its our money…how long will others regulate things that we deserve. I mean tax regulations from the last time was fair enough. But keeping funds in Paypal or withdrawing them to our bank….shouldn’t that be our decision? Or simply shouldn’t it be our choice how we are going to spend our own money? Monopoly is never good……we need an alternative for Paypal.

  • http://www.animhut.com/ SriGanesh.M

    I am doomed !! MY paypal account has $300 in them and sending limit to another paypal(verifed) for banl transaction !! :D

    –=-=-=
    too bad !!

  • http://www.techvorm.com Paritosh

    This is bad bad news for casual online income generators. Payoneer is dead too :(

  • Rahul K.

    Any way out of this ?
    How to make payments for ebay.us goods and other stuff now.

    • http://techpp.com Raju PP

      Rahul, you can still make payments via Paypal, but the thing is you can’t use your existing balance on Paypal (the funds which you got from someone else). But you can use Paypal to make payments to anyone (including ebay) but for that you need to link your credit card.

  • http://www.gadgetcage.com Siddartha Thota

    The Ministers who saved crores of black money in Swiss banks were happily enjoying their lives, due to few recommendations from higher officials and the RBI is leaving them to roam freely without any taxation problems and they were showing that agony on Small Capital earners….
    Its the worst decision, and its going to hurt Indian freelancers for sure.
    :(

  • Regine

    That´s sad. How dare?

  • Ashish

    Hey, if we all of freelancers write to RBI about our issues, may be they think to change the policy. what you think guys, please get the contact of RBI officers and we will write e-mail or lettter. please update my suggestion.

    Ashish

    • http://techpp.com Raju PP

      Issue is clearly with Paypal and not RBI, will explain that in detail in a post

  • http://www.maheinfo.blogspot.com Mahendra

    There are many alternative for paypal. But cannot beat paypal

  • Rahul K.

    Mahendra, what would be the next best alternatives to Paypal in terms of fees and shopping cart integration to website ?

  • Sushant

    Oh yeah suddenly RBI got a fever of taking legal money out of freelancers but what about corrupt ministers.

  • Ashish

    Hi,

    I really want to know the best alternate of paypal, bcoz in USA most of the persons using Paypal, the alternative of paypal should be used my most of the peoples in USA and other country.

    looking to hear from you

    • http://techpp.com Raju PP

      sad thing is, there is NO decent paypal alternative. If you google for that you will find several blog posts listing out the alternatives, but the truth is there is NONE. That explains why Paypal isn’t too worried about business in India. If you are based in India, CCAvenue is possibly the best payment gateway, but it is not a Paypal alternative.

  • ads

    You use PP for your own good. They are independent and can set rules what they like. then why you ask others to rip PP. meaningless

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