Latest Changes by Paypal for Indians – 1st March, 2011
PayPal and its Discriminatory Business Practices towards Indians – shielding behind RBI
The renowned Internet bankers PayPal have announced drastic changes effective 1st March 2011 – virtually crippling the operation of personal accounts of Indian citizens. This is against all norms how an International Bank should conduct business and grossly discriminates Indians, among the International community for no fault of theirs.
Before going into the analysis, PayPal have announced by individual emails to Indian customers some strange conditions as follows, which startles one and all:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
Now for those who do not know, there are thousands of Indian customers using the service of PayPal. At the time of joining, the unwary Indians were lured by the terms and conditions of this online Bank – as being one of easy and most suitable for trusted operation for crediting and debiting money into their accounts, for their small business transactions online.
Let us explain by a simple example: You are a freelancer. You get projects or assignments from various countries and enter into a contract with the service buyers that on completion of the project, the remuneration should be credited to your PayPal account. You accumulate all those earnings and withdraw the funds from your account whenever you wish. Withdrawal is mostly through online transfer to your account in any Indian bank.
Supposing you work as a team manager, you distribute the work and on realization of the remuneration into your account, share the proceeds in the same way by advising PayPal to credit the money into the accounts of the team members. All these years this system was working smoothly, whereby a lot of Indian freelance writers were benefited.
Now because of the above restrictions – you cannot receive more than $500 per transaction; cannot accumulate funds; should withdraw your balance within 7 days; cannot transfer amounts to your team members. Why elaborate? Simply put your PayPal account is as good as dead.
Now the question is how an International Bank like PayPal ditch its customers like this – particularly Indians? Basically no International Bank – especially existing on the Internet – is bound by the rules and regulations of any particular Government of a country; because Internet is a world phenomenon and a technology for use by global citizens. These conditions of PayPal will not apply for an American; Australian; British or for that matter anyone, other than an Indian. If this is not discrimination aimed at a particular country’s citizens, what else is?
The ruse as given by PayPal “to ensure we continue to comply with the RBI guidelines” is to say the least – a lame excuse. They cannot get any credibility over such an excuse, to show gross violation of basic rules of the Banking industry; or even principles of natural justice; customer is supreme over any commercial organization; and would amount to showing discrimination exactly like the apartheid on color, race, and ethnic differences, the world has seen and vehemently condemned in history.
Even admitting, and not accepting the argument of PayPal, the objective of RBI regulations is intended to curb nefarious practices, such as hoarding black money and laundering illicit earnings into white by big money-bags. While so, where is justice in curtailing the activities of small customers like poor writers? They work hard in finishing foreign assignments; compete with world writers; and win contracts by competitive offers; and in doing so enhance the reputation of India as a whole.
So the remedial measures fair and just will be – to enhance the limit of $500 per transaction to at least $2000; remove the restriction to Paypal withdraw compulsorily within 7 days; allow customers to accumulate funds in their accounts up to $3000 as ceiling; allow transfer from one PayPal account to another; and let customers act freely as before within these limitations. In these hard days of inflation and economic conditions prevailing all over the world, the amount of $500 is nothing tangible; and imposing such a restriction is equal to nullifying the accounts of small entrepreneurs from India. If your real intention is to catch big fishes evading the law, please leave the law-abiding small fishes; for honestly they are not committing any crime by being PayPal customers!
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Comments
The thing is that there is a bunch of retarded and lazy people occupying RBI. A bunch of idiots just like the scammers in our government. They don’t care about the online world.
They are illiterate men who have no idea about where the internet has reached these days. They still have the mentality of the 1950’s. Bunch of idiots the RBI and government men are.
Really Neha im too frustred with RBI policy with Paypal…im running web hosting company and Digital Products Marketplace, few download site my 90% trasaction through Paypal…if its continue happen then sure i have to change my way of bussiness whih is not easy.. 
I am also very disappointed with Paypal. Why RBI targeting to small business only? I am agree with your suggestions.
Let’s see what is RBI’s next plan?
Suggest some alternatives please… I really need one