Paypal India Restricted

[id62000]

With new amendments in paypal India's TOS, in compliance with the RBI guidelines, Indians will find it hard to have a reason to open a paypal account in future.

Originally Posted by Upcoming changes to PayPal User Agreement for India

As part of our commitment to provide a high level of customer service, we would like to give you a 30-day advance notice on changes to our user agreement for India.

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:
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.
We seek your understanding as we continue to employ our best efforts to comply with the RBI Guidelines in a timely manner.

Originally Posted by paypal

Starting March 1, 2011, we will stop allowing PayPal customers in India
to send money from their account balance. This change is to ensure that
we continue to stay compliant with the latest RBI guidelines. While you
will no longer be able to send money from the account balance, you can
still send money using a credit card linked to your PayPal account. If
you don’t have a credit card linked to your account when you try to send
money, we’ll explain how to link your card.

You can still receive payments on your PayPal account however you must
need to transfer it immediately to your Indian bank account within 7
days of receving the money from your buyer. There is no limit for
transferring the money to your bank account, you can transfer as much as
you want.
However you will not be allowed to receive payments for any
export-related goods or services for an amount exceeding US$500 per
transaction.

I do aplogize for any inconvenience, this change is to ensure that we
continue to stay compliant with the latest RBI guidelines. We are
attempting to meet requirements set by RBI (Reserve Bank of India) in
order to remain compliant and continue PayPal services in India.

Our bureaucrats seem to have mistaken Paypal for the swiss banks. With the new limitations, using paypal for overseas business will come to an end.

[italkcash]

What a ridiculous and pointless rule! This makes absolutely no sense. Can you give us an update on how AlertPay is working in India? It would be interesting to know if every mayor online is affected by this or if they only targeted PayPal.

[id62000]

The other online payment processors are working as usual. Small Indian online workers have switched to Moneybookers long back as Paypal from the start had little advantage what with the comparatively high transfer fees. eBay India switched to PaisaPay, a recent eBay acquisition, that works with CCs and DCs and had no connection to the Paypal accounts.

With moneybookers, Indians have been able to withdraw via ATM debit cards (for a small fee), and LibertReserve is popular as it always was.

Paypal is the only processor to be effected so. A year ago, RBI guidelines required Paypal to account for their Indian customers withdrawal/income by adding their PAN(something like the American SSN) to their online accounts for the income tax dept to home in on tax evaders.
Other non-US based processors do not usually follow norms set by the government.

[id62000]

Q: Why will PayPal not allow me to receive more than US$500?
Starting 1 March, 2011, PayPal customers in India will not be allowed to receive payments for any export-related goods or services for an amount exceeding US$500 per transaction. This change is to ensure that we continue to comply with the RBI Guidelines.
Q: Why will PayPal not allow me to keep money in my PayPal balance?
Starting 1 March, 2011, PayPal customers in India will not be able to keep money in their PayPal account balance. Instead, all money received into a PayPal account must be transferred to a customer's India bank account within 7 days from the receipt of confirmation from the buyer in respect of the good or services. This change is to ensure that we continue to comply with the RBI Guidelines.
Q: Will my customers be able to complete their checkout with their PayPal account balance?
We're glad that you offer PayPal to your customers. Unfortunately, we will not allow customers in India to send money from their PayPal account balance starting 1 March, 2011. This means that your customers will need to link a credit card to their account in before sending you money with PayPal. This change is to ensure that we continue to comply with the RBI Guidelines.
Q: The customers on my website are not able to complete purchase or pay via PayPal. Why?
Starting 1 March, 2011, PayPal customers in India will not be allowed to receive payments for any export-related goods or services for an amount exceeding US$500 per transaction. If you are listing products greater than US$500 per transaction then you may need to seek alternative methods of payment. This change is to ensure that we continue to comply with the RBI Guidelines.
Q: What is meant by receipt of confirmation from the buyer in respect of goods and services?
As an exporter of products or services abroad, you need to ensure that your buyer has received the product or services as per specifications set out on your website. As an exporter of goods, you may withdraw the balance to your bank account in India upon reasonable consideration of shipping time and other clearances such as excise and customs for the destination country. As an exporter of services, you may withdraw the balance to your bank account in India upon receipt of payment from your buyer into your PayPal account.
Q: I am unable to find the Mass Payment feature in your website. Why?
In order to comply with the RBI Guidelines, PayPal customers in India will not be allowed to use the Mass Payment feature. In accordance with the regulations, we will be disallowing users from using any balance in and all future payments into their PayPal accounts to buy goods or services. All users will have to use their credit cards for making such payments. Since our Mass Payment feature supports only payment from balance and not credit cards, we will be discontinuing this feature. However, users will be able to receive Mass Payment into their PayPal account.

source: paypal india site

[id62000]

New updates from PP's customer service emails:

1) Paypal waives off all charges for withdrawal of funds below Rs 7000 with the following:

With regards to your concern about the new changes in withdrawing funds,
PayPal will waive withdrawal fees for withdrawals less than 7000INR.

which means Indian account holders do not have to pay any fee (the old Rs 50/-) for withdrawing their balance. (However, the effect is yet to be seen as of today)
Of course, above Rs 7000 is free according to their old rules.

2) Indian account holders will be able to withdraw amounts less than the minimum $10 at a go.

3) If the withdrawal is not done manually, their system will automatically transfer your funds for you into your bank.

Note from id: try waiting for the #2 and #3 claim to work before running head-on expecting #1 to work