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Post Info TOPIC: PayPal India Goes Back To The Dark Ages


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PayPal India Goes Back To The Dark Ages


PayPal India Goes Back To The Dark Ages

In what is largely seen as a regressive change to PayPal India's terms and conditions, the company, starting March 1, 2011 would NOT allow its Indian users to make purchases for goods and services directly from their PayPal accounts. If that wasn't all, users would have to transfer payments received to their accounts to their respective banks within 7 days of the receipt of the money. The worst part? You cannot receive more than $500 per transaction for your goods and services you offer - which is seriously lame. If you happen to be a Freelancer, this ain't particularly heartening news for you, is it?

Here's what the official announcement mockingly tells you:

"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

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

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

Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction."

This will undoubtedly affect people who are dependent on PayPal for services they offer to foreign clients.

Paypal has also put up an FAQ that blames the RBI for this fiasco:


 

(more at link)



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PayPal for Indians,- the hidden secrecy


Priyankan Goswami, March 08, 2011

In continuation to the news and articles on the issue of PayPal and RBI conflict on guidelines and new regulations published in Times of Assam, we have found in our further course of investigation and analysis of the issue that PayPal has been continuously playing fowl against the Indian customer. For instance, in India, PayPal is serving its customers not as a Global entity for money transactions but as a registered Indian entity PayPal Pvt Ltd, a Private Limited Company of India, about which PayPal origine hasnt mentioned anywhere. All transactions by PayPal in India are NEFT i.e. National Electronic Funds Transfer, which makes the entity virtually acting as a Bank just like any other common Bank of the country which provides E-banking through NEFTs. So any directive from The RBI to PayPal Pvt Ltd of India is actually not unjustified as it would have been to PayPal origine.

Right from its starting days of operations in India, PayPal was found to be only keen in reaping off maximum benefits with over-expensive services. The huge amounts which the Indian customers have over the years ended up paying to PayPal is because of the entitys fraudulence and to some extent monopoly of the market, not to forget the average Indian merchants lesser knowledge of the e-commerce world. Of course lack of vigilance from any authorities and no united body of freelancers in the country to protest added to PayPals delight. For example, the entity making mandatory for Indian customers to have a credit card to use its services was completely a fake gimmick of regulations. A high level source from the RBI has confirmed that there was no regulation or directive that online money transfers requires a compulsory credit card!


continues...



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PayPal Now Requires Purpose Code, PAN & Bank Account Details From Indian Users

By Anupam Saxena on May 9th, 2011

After putting a limit on receiving payments at $500, and crippling the service's online wallet functionality for Indian users, PayPal has now made it mandatory for its users in India to furnish additional information, including a purpose code, permanent account number and bank account details, in order to continue to receive payments. The information, it says, is needed to comply with the requirements set out in the notification of the Reserve Bank of India, that apply to all online payment gateways.

According to the RBI Guidelines, issued vide a circular on November 16th 2010, Authorised Dealer Category- l banks will have to ensure that purpose codes are reported to the RBI. They also need to submit all the relevant information relating to any transaction under this arrangement to the Reserve Bank, and user accounts are subject to a quarterly audit. PayPal is simply complying with the guidelines, in order to continue its operations in the country. However, the guidelines do not explicitly mention the requirement of a PAN from the user.

PayPal Vs RBI

- In February 2010, PayPal disallows Person to Person payments, and electronic withdrawals through local Banks, on RBI's instructions, although it allowed cash-outs through cheques.

- It later restores cash-outs through local banks for export settlements, provided the users submit an 'export code'.

- A few days later PayPal said that it only required a 'Purpose Code' from businesses and not an 'export code', and that they make available relevant documents for scrutiny if required. Although, cash-outs for P2P payments was still restricted to cheques.

- In July 2010, PayPal suspends electronic withdrawals again for some days, only to restore it later for export settlements. However, it disallows re-use of received payments for making purchases or other payments, thus acting merely as a money transfer service, crippling its online wallet feature.

- After RBI's new guidelines, PayPal, in order to comply, mandates users to transfer payments to bank accounts within seven days of receiving them, and puts a per transaction limit of $500 on payments that can be received.

***

Email Received From PayPal:

Dear Anupam Saxena,

As part of our ongoing effort to comply with the requirements set out in the notification of the Reserve Bank of India ("RBI Guidelines") that apply to all online payment gateways, all PayPal users in India will be required to add the following to their PayPal account in order to continue to receive export-related payments and withdraw money:

A purpose code related to the majority of commercial activities for export-related payments
A PAN or Permanent Account Number
A bank account in India (if not previously added)

To add a purpose code, PAN and bank account:

1. Log into your PayPal account at www.paypal.com/in
2. You'll find prompts on the top of your "My Account" page asking you to "Add" your PAN, purpose code and bank account
3. Click on the "Add" links and follow the instructions.

Additionally, PayPal users in India are required to provide a current and accurate postal address on their PayPal account. To ensure that your address is up-to-date:

Log in to your PayPal account at www.paypal.com/in
Click on "Profile" and select "Add/Edit Street Address".

In case you have any queries, please log into your PayPal account and click on 'Contact Us' at the bottom of the page.

For users who have already added a purpose code, PAN, and a bank account in India, as well as validated their postal address, please treat this email as a reminder only.

Sincerely,

The PayPal Asia Team



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