PayPal blocks Personal Payment to and from India

knoughtyd

PayPal halts Personal Payment Transactions to and from India

PayPal Inc,the online payments service owned by eBay,has suddenly taken the unusual step of blocking all personal transactions to and from India for more than a week without any prior notice A spokesman for the service said on Saturday that "personal payments" to and from India are being blocked even Transfers to banks in India are being suspended as wellStrangely, Paypal has offered no justification for this decision

Anuj Nayar,the director for global communications at PayPal,said PayPal is taking the step while it answers questions that have arisen about the service. He declined to elaborate.Nayar said the suspensions began Jan 28.He wrote in a blog post that PayPal hopes "to resolve the situation as quickly as possible."

Originally Posted by Anuj Nayar,Paypal

I’m writing to let you know that personal payments to and from India and transfers to local banks in India have been suspended while we work with our business partners and other stakeholders to address questions they have about the service.

During this time, customers can still make commercial payments to India but merchants cannot withdraw funds in Rupees to local Indian banks.

We’re trying to resolve the situation as quickly as possible and we’re really sorry for the inconvenience that this may cause our customers in India and around the world.

This move from PayPal has left thousands of its Indian users including Me and especially IT coders who work with many entities overseas and receive payments through PayPal, high and dry.Users whose transactions have been reversed are venting their frustration on online forums and message boards. Funds requested through PayPal India are being reversed to their senders, and users have no access to them

Here is the standard response PayPal is sending to customers

Your payment of xxx has been sent back to the sender of the payment. We reversed this payment because we have stopped allowing personal payments to be sent to or from India.

If this was a payment for a purchase of goods or services, and not a personal payment, then you may contact the buyer and have him or her resend the payment as follows: (a) click the Send Money tab, (b) select “Goods,” and (c) provide a shipping address.

If this payment was a personal payment such as a gift, then we have requested that the sender find another payment method until we restore personal payments to and from India. We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience.

Last year in November, the Indian government had issued a notification for prevention of money laundering. Under this notification, the Reserve Bank of India (RBI) has asked all banks and financial institutions to maintain proper record of all transactions and verify identity and address of a non-account based customer or a walk-in customer.Payments to and from PayPal to its account users in India may also involve the foreign exchange maintenance act(FEMA) that has been under a cloud over the black money issue. On Friday, many renowned personalities had filed another petition in the Supreme Court seeking a direction to the Indian government to bring back unaccounted black money to the tune of around Rs65 lakh crore (Rs65 trillion) stashed away in banks abroad.

Although PayPal provides money transfer service to and from India, neither the company nor its account holders pay any tax on the transaction.Many Indian account holders ask their payee to make the payment as a ‘gift’ rather than payment for services to avoid PayPal fees

When contacted to know about the PayPal issue,an RBI official said,

Originally Posted by RBI

We have no idea why this is happening. PayPal doesn’t come under RBI’s purview

General Assumption is that as Lot of business is transacted in India via PayPal—business done with personal transactions. So a money-hungry Indian government is aggravated at some perceived revenue loss (taxes, customs, etc.) and has put pressure on PayPal to stop the payments either directly or indirectly

Now the PayPal users from India including Me are left with no alternative but to search for an alternative payment service

xXx

^how about Google Checkout

But i guess its gonna be temporary halt of the service. I can imagine the plight of people depending on Free Lancing Work

Vampire

Zeus

Anda, Google checkout doesn't allow you to transfer money to another customer.

Paypal is like bankaccount exchange. You have your account in anybank of your choice, I'll have mine in a different bank, but we can exchange money thru paypal and that was the beauty of it.

Safin

Absolutely lame. Got a hefty amount reversed due to this and now i will have to discuss with the agency to get it back.

Absolute unprofessional conduct if there ever was. Can you imagine a company issuing a chargeback like this in US? There are people who have worked on freelance sites, earned in 1000$'s and given the product to the end user who paid them the amount. Now wonderful paypal has just reversed the payments and the end user got the product and the payment and if he wants he can just never pay.
PayPal Halts Personal Payment Transactions From And To India

Atleast give a notice and do it for future payments. Lameness++
Waste of time,, and money.