Tuesday, July 27, 2010

PayPal suspends electronic withdrawals for India users

Yesterday, I received this mail from PayPal:

In accordance with regulatory instructions, we would like to notify you about a change in our withdrawal functionality in India starting on August 1, 2010. At present you can request for either an electronic or cheque withdrawal of funds from your PayPal account if you are an India user.
From July 29, 2010 onwards, you will only be able to request for a cheque withdrawal of funds from your PayPal account.
While we are working hard to restore the electronic withdrawal service, in the meantime, we are bringing this matter to your attention so that you can plan your future withdrawal activities accordingly.
To request for a cheque withdrawal:
  1. Log into your PayPal account, click on 'Withdraw'.
  2. Click on the 'Request a cheque from PayPal' link.
  3. Enter the withdrawal amount and select your mailing address, then click 'Continue'.
  4. Click 'Submit' to confirm your request.
In order to help you with this change and until further notice, we will refund the $5 USD cheque withdrawal fee to you for cheque withdrawals made on July 29, 2010 onwards.
For any questions, please log into your PayPal account and click 'Contact Us' at the bottom of the page.
We apologise for any inconvenience caused from this change in our withdrawal functionality. We will provide ongoing updates to you here. We thank you for your attention and patience as we work tirelessly to resolve this situation as quickly as possible.

Thank you,

The PayPal Asia Team

This is not the first time the e-pay service has faced hurdles from Indian authorities. In Feb 2010, all PayPal services in India were temporarily suspended, apparently due to inquiries from Indian regulators about the classification of payments as commercial payments or as personal remittances by people working abroad to their families. The suspension of service took many Indians by surprise. PayPal resumed the service in March 2010, adding an additional field called 'purpose code' to collect information on the nature of the transaction.

However, Indian users can still make international payments to vendors.