PayPal restricts payment to India
Source: Agencies |
January 30, 2011, Sunday
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Print Edition
Print Edition
PAYPAL is making more changes to its online payment service in India, saying it will begin restricting the size of payments to merchants there because of new rules from the Reserve Bank of India.
In a Friday post on PayPal's blog, spokesman Dickson Seow said the rules imposed by the bank will be effective March 1.
The changes are just the latest to PayPal's service in the country: The company began blocking personal payments to and from India last January after regulators questioned whether PayPal payments should be regulated like wire transfers of cash. The ability to withdraw funds from a PayPal account in India, which was also suspended, was reinstated in July.
Under the new rules, India-based merchants who use PayPal won't be able to receive payments from outside India for more than US$500 per transaction, Seow said.
"For purchases or payments above this transaction value, you will have to use an alternative payment method," he said.
PayPal spokesman Anuj Nayar said the "vast majority" of PayPal transactions in India are for less than US$500.
The new rules also stipulate that, as of March 1, PayPal users in India won't be able to use their existing balance and future payments to buy items. Instead, they must transfer funds to a bank account in India first.
PayPal users within the country who sell goods to buyers outside India will have to transfer their PayPal funds to a bank account in India within a week of being notified that the buyer has gotten their purchase. However, users in India will still be able to use PayPal to buy items from foreign merchants over the Internet.
Nayar said because the rules were put in place by the bank, they will affect all online payment services in India.
In a Friday post on PayPal's blog, spokesman Dickson Seow said the rules imposed by the bank will be effective March 1.
The changes are just the latest to PayPal's service in the country: The company began blocking personal payments to and from India last January after regulators questioned whether PayPal payments should be regulated like wire transfers of cash. The ability to withdraw funds from a PayPal account in India, which was also suspended, was reinstated in July.
Under the new rules, India-based merchants who use PayPal won't be able to receive payments from outside India for more than US$500 per transaction, Seow said.
"For purchases or payments above this transaction value, you will have to use an alternative payment method," he said.
PayPal spokesman Anuj Nayar said the "vast majority" of PayPal transactions in India are for less than US$500.
The new rules also stipulate that, as of March 1, PayPal users in India won't be able to use their existing balance and future payments to buy items. Instead, they must transfer funds to a bank account in India first.
PayPal users within the country who sell goods to buyers outside India will have to transfer their PayPal funds to a bank account in India within a week of being notified that the buyer has gotten their purchase. However, users in India will still be able to use PayPal to buy items from foreign merchants over the Internet.
Nayar said because the rules were put in place by the bank, they will affect all online payment services in India.
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