You can’t keep money as a balance in your existing PayPal account, you can’t take money more than $500 per transaction from any buyer and for services, money transferred in your account should be withdrawn to back account in 7 days of transaction confirmation….. These and many more new restrictions and limitations are coming on PayPal from 1’st March 2011 for Indian users in order to follow the guidelines from Reserve Bank of India (RBI). After few months of previous shock from PayPal for Indian users, this is another disappointing update coming from PayPal to its Indian users about the advance notifications about these limitations.
Here is the excerpt from email that PayPal India users received from PayPal today,
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.
Important points from this notification:
1. Indian users can’t receive payment more than $500 per transaction for export items and services
2. Users from India can’t keep balance amount in PayPal and use that to purchase items or services. Even if you receive a payment in your PayPal, you will have to withdraw that within 7 days of transaction confirmation to your bank account. You may do so using online withdrawal or thru cheque.
3. No payment from your PayPal account. That means, from 1’st march 2011 you can’t use PayPal to pay for hosting charges or to buy items on web. You will have to use Credit Card for that purpose.
PayPal has created a FAQ page where you can get more information about this update. As lot many webmasters, online businessmen are using PayPal for receiving money from different countries and let them buy stuff using PayPal checkout. This limitation will definitely disappoint them as they will have to look for other Payment systems similar to PayPal. There is no doubt that PayPal is the most popular payment system on Internet and buyers are sellers both are comfortable using this payment system. In that case, Indian users will definitely face the problem asking buyers to use other platforms to send money.
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