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.

Comments

  1. SoniaJuly 29, 2010 at 11:36 AM

    A new fact about Pay Pal :

    I applied for a charity account with Pay pal because its free and supported by vbulletin software for payment subscription, I have all the documents like NGO Registration certificate, Memorandum of Society, Society PAN card, and the Bank details , bank details were verified by the Pay Pal by depositing amount of Rs. 2 and 40 paisa, after submitting all the document as per said in their website and in their emails, they denied me for the account, just because they have no tie-up with India regarding charity account, what the hell is this, why the pay pal people should not mention at the time sign up process. I have wasted around 1000/- rs in doing fax to pay pal and after 4-5 days they denied.
    Don't apply for a charity account with pay pal if you are living in India. Just wastage of time and money.

    ReplyDelete
  2. NishaAugust 3, 2010 at 5:29 AM

    Yes, it is true that international remittances to India are subject to very stringent regulations. I think the govt is much to blame for it. But I would like to see a localised equivalent that would allow remittances, maybe if it came under RBI regulation, the end-users would have an easier experience. Thanks for reading and commenting!

    ReplyDelete

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