Paypal has amended its user agreement for India, and it shall be effective from 1st March, 2011.
Here is the impact of amendment:
PayPal will not allow users in India to receive more than US$500.
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.
PayPal will not allow Indian users to keep money in PayPal balance.
Starting 1 March, 2011, 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. This change is to ensure that we continue to comply with the RBI Guidelines.
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Customers in India will NOT be able to complete their checkout with their PayPal account balance.
“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. This change is to ensure that we continue to comply with the RBI Guidelines.
Overseas customers will not able to complete purchase or pay via PayPal for amounts above $500.
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. This change is to ensure that we continue to comply with the RBI Guidelines.
What is meant by receipt of confirmation from the buyer in respect of goods and services.
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.
Paypal started sending the amendment message over email & through their blog to all Indian users starting at 12:00 PM tonight. Expect more chaos tomorrow morning, but thankfully, Paypal has given 30 days advance notice to all users to adapt according to the new circumstances.
Their email reads …
“Dear user,
As part of our commitment to provide a high level of customer service, we would like to give you a 30-day advance notice on changes to our user agreement for India.
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.
We regret any inconvenience caused to you and hope the advance notice will enable you to plan your future use of our services accordingly. For further information, click here.
If you have any questions, please contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page. We sincerely thank you for your patience and continued support.
Sincerely,
The PayPal Team”
Well, since this is RBI’s enforcement, one can take it as written in stone. The question is, how tough the situation has now become for entrepreneurs to compete and stay level in the international business arena? Was the leadership correct to stop payments earlier last year, and is the approach right this time to stop incoming business and money?
Ceiling @ US$500 per transaction sounds cheap to me does it not?
What is happening?
[Qn: Paypal Alternatives in India?]
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