PayPal isn’t working properly in India. eBay’s electronic payment juggernaut appears to be blocking personal transactions to or from accounts of India-based users. It is reversing personal transactions; transactions involving businesses are still allowed.
A reader checked in with us yesterday to let us know PayPal notified him that the company had stopped allowing personal payments to be sent to or from India (full e-mail can be found below).
This does not appear to be an isolated incident: see here, here and here for more reports, although we gather commercial payment transactions are unaffected at this point.
This is the standard notification e-mail people are receiving in their inbox:
Hello XXXX,
Your payment of xx has been sent back to the sender of the payment.
We reversed this payment because we have stopped allowing personal payments to be sent to or from India.
If this was a payment for a purchase of goods or services, and not a personal payment, then you may contact the buyer and have him or her resend the payment as follows: (a) click the Send Money tab, (b) select “Goods,” and (c) provide a shipping address.
If this payment was a personal payment such as a gift, then we have requested that the sender find another payment method until we restore personal payments to and from India.
We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience.
Thank you,
PayPal
Asked for more information, Binary Turf received a meatier but equally vague response from the customer service department:
Dear ,
Thank you for contacting PayPal.
I understand that you want to know why the payment you received for $ USD from is reversed. This payment was sent as Personal. We have stopped allowing Personal Payments to be sent to and from India. We are aware of this issue and I sincerely regret the inconvenience it has caused you. We are trying to resolve this as soon as possible. Below are the details:
Personal Payment – Send Money for India Accounts
· India customers are no longer able to see the option to send a Personal payment on the Send Money page · They can continue to use other payment options, such as eBay checkout.
If this was a payment for a purchase of goods or services, and not a personal payment, then you may contact the buyer and have him or her resend the payment as follows: (a) click the Send Money tab, (b) select ‘Goods’, and (c) provide a shipping address.
If this payment was a personal payment, such as a gift to a friend or family member, then we request that you find another payment method until we restore personal payments to and from India.
Although India customers are unable to send Personal payments, they are still receiving Personal payments from Non India customers.
· In order to stop ALL Personal payments TO and FROM India accounts, we have started reversing Personal payments sent by Non India customers starting today. (the only exception will be in cases where the buyer has included a shipping address – we don’t want to delay any shipment of goods) · Emails will be sent to both sender and recipient to let them know why the money was returned and what options they have to proceed forward. (see attached for examples)
· We are also in the process of implementing a change on the website to automatically stop the payment from processing, rather than waiting to reverse the payment. We will send you additional updates as soon as we have more details.
The Personal payment option on the International Send Money page has been updated and India has been removed from the ‘select a country’ drop down list.
· If the payment was for a purchase of goods or services, and not a personal payment, then the buyer may resend the payment to the seller by following these steps on the PayPal website: (a) click the Send Money tab, (b) select ‘Goods’, and (c) provide a shipping address.
I’ll be glad to hear from you if you need clarification, please email us again and we will try our best to give you immediate answers. Thank you for choosing PayPal for your online payment needs. We appreciate your business.
The wording seems to suggest that this is a temporary decision, but it’s still unclear why the company decided to take such drastic measures with no prior warning on policy changes whatsoever, and why this appears to be occurring in India only.
We’ve contacted PayPal and will update when and if we hear back.
Update: Anuj Nayar, Director, Global Communications at PayPal tells us:
I can confirm that personal payments to and from India have been suspended while we address some questions from our business partners. You can still make commercial payments. We’re trying to resolve the situation as quickly as possible and we’re sorry for any inconvenience this may cause.
Guess we’ll have to wait until the issue is addressed.
(Hat tips to Jitendra Agrawal and Mahendra Palsule)
It’s most probably because of the laws in India or for some security reasons. For instance, PayPal is not really available in Mauritius because we don’t have any laws regarding it here. So, don’t place PayPal fully but the government of your country as well.
Hey…Xoom may be a great option to try out. They have no fees and the exchange rates are fabulous. I used to use Xoom earlier also.
Website http://www.xoom.com
Dude…don’t use these forums to hard sell some brand…if you want to, at least do it discreetly. Proves the fact that people/agencies/brands just don’t understand social media. Its not about putting a fake looking line in a related forum. At best, it just puts you off from trying the brand.
On the PayPal to India issue, it seems like the regulator has pulled them up. PayPal never used to actively push this piece cause they probably saw this coming…
This is really insane. Another example of Paypal’s terrible customer service policies. They really don’t care about their customers, and this seems to be ingrained in their company DNA.
On monday this week I sent a cash gift to a friend in India, and today he found out how it was AUTOMATICALLY reversed from his account.
Best advice to everyone using paypal: DON’T KEEP YOUR CASH IN YOUR PAYPAL ACCOUNT
They have a history of doing stupid things like this, and if you ever have the good fortune to have someone dispute a payment or you run into their fraud management algorithm they will either lock up your money or lock you out of your account. I’ve had both happen to me and it’s really really frustrating. At least when they lock you out of your account they keep allowing you to receive payments.
They’re horrible and please please please we need some real competition to them. Google checkout is actually worse, and Xoom has a reputation for being a scammy company. I don’t see any viable alternatives.
People need to be really careful with the trust they give to online payment services. As far as I’ve seen, there aren’t any online-only banking and payment companies that you can really trust. I tried eTrade once as well and that was an insanely horrible experience.
If you want to make sure your money is available for your use, keep it in an account in a major U.S. bank that has physical branches. FDIC insurance only insures your money as a last resort so you don’t want to rely on that.
And if you have to make a paypal payment, never use your paypal balance to fund it. Transfer all the funds out of your paypal balance and instead use your credit card as the funding source. This way you don’t have to rely on paypal’s crack squad of hired morons to do their 30-day turnaround investigation service and present their ‘findings’.
I don’t work for one of PayPal’s competitors, but I wish I did. I’d enjoy burying them.
People should stop using PayPal, companies that have changed due stupid patriot act and similar stupid american laws
Hi,
I am one of the guy who f’ed because of this. I had sold a piece of code for a client based in NY and received payment for it on 02/02/10 but on 02/04/10 they reversed it. And while reversing it they gave him -20$ less, WTF!!! I dont know how I was supposed to uncode (if there is a term) for him but luckily for me he offered to pay me through alternative means (check).
@magnum, hell yeah!! lets divert the troops of Iraq to India. Grow out of your negativity, its about time!!
I am sure there must be some valid security reasons for PayPal to take such a step. Most of us would admit that PayPal is a great merchant account that offers much more features and services than most others do.
Lets wait until they release an explanation to this.
You want to know why paypal stops its transaction on india?
If you happen to be one of the members of BH (BlackHat) forums, you can see that selling of Virtual Address cards is like a hot knife through butter now. As you can see, with this type of gimmick, you can have a verified paypal account without going onto such process of having a verified credit card…
All you need is that virtual address — Now, the crazy thing is, some indians manage to hack this and know how to get this illegally.
Well, I guess today won’t be the salary day for freelancers residing on india… wheuu
Here’s the top reasons you should know before venturing to paypal: http://bit.ly/why-you-should-use-paypal
@yAdhav you may be right here, but since we are dealing with paypal, they should have send us an email before making anything like this. I dont know how many of you will be agree, but all the clients are not the same and I’m sure many of Indian paypal users are going to lose a big sum here.
@Harsh: I agree Paypal has been harsh on India. They should have communicated their intentions in advance. This is one of the consequences when companies do not have competitors. Can’t you guys in India come up with service similar to Paypal?
Yes, paypals monopoly is creating problems. Such a serious issue and the guy Anuj, tells it to us in 100 words (https://www.thepaypalblog.com/) . Atelast have the decency to tell us the reason why this is happening and how serious this issue is.
Apparently they have..officially, that is..
http://twitter.com/PayPal/status/8736622317
http://bit.ly/a6lQvJ
But seeing that Paypal has just 3000 odd followers on Twitter and their official blog post got retweeted just 20 odd times, I guess nobody wants to hear from them..
Why dont Pakistan and India come up with a payment solution of their own ?
Its high time someone should start such a service.
I was so frustrated six months back when I found that Pakistan was not included in Paypal’s list of countries private or corporate wise !
Another similar report here
http://www.quickonlinetips.com/archives/2010/02/paypal-stops-india-payments/
Paypal wants the receiver to get charged with some fees, which is no issue but they should have notified via email.
This is an absolute act of racism and amateurism from Paypal. Why India? There are so many popular bloggers and also marketers in India which uses Paypal as payment gateway and also to do personal payments.
I think it is time something better than Paypal crops up. Fed up of the clownish decisions of Paypal!
Your a moron. Learn what racism is.
You bastard Chris, if this is not racism what else is?
why the hell should a money-transacting bloody agent try to step into the role of a “regulator”
Fucking bastard, why do you block India from personal payments – and if you are blocking by nationality when there is no obvious war or large scam with Indian accounts, the underlying reason is likely to be racism.
Do you have your brain on your arse? you asshole!
Hi Keish,
I am agree with you,why all these happen with Indian only ????
Because more Indians are using personal payments for business transactions to circumvent the fees. When all the payments start to be personal, including sharing of rent between someone in India and someone in UK, it raises a huge flag.. Just use it to send money by using the normal transaction route and it will work.
Use masspay if you want to reduce the cost
You guys are real retards. Paypal isn’t being racists against india. It is YOUR COUNTRIES restrictions against paypal. Do some research.
And stop complaining about American services. I know they are not the best but where is INDIA”S SERVICE? You guys live like KINGS off of USDs and then moan and groan about the very means that feeds you. If you don’t like it then start servicing your own country and start your own online payment method. stop btchn about Americans. Maybe you are a racisist because you are depriving many american out of jobs by charging way less than it i is possible for americans to even live on. Nice to be able to make money from the USA but not have to pay the expenses in the USA huh……………….
The current issue has a lot to do with India’s banking institutions. Paypal has little interest in losing business in India.
From some sources I have been told that it has something to do with the latest feature brought by PayPal with which now Indian Users can also get their PayPal account verified through Bank Accounts..Due to this, there have been some problems which might have resulted in this…
Just a random guess..
No issues with stopping personal payments. But they reversed payments received for services too loll. Their system can’t differentiate a personal payment from a payment made for a service.
Its not just personal and services. They have now started even reversing “Goods” payments as well. Check the DP thread. Many people have even shipped the goods and the payment is reversed now.
racism how? LOL..
Mr Anand Srinivasan:
Have you got your arse fucked up in the U.S. and got your GC?
Otherwise, how this is not racism when they have specifically stopped payments from and to a reputed country?
This from an India! Bah! disgusting!
Hope your current ass-licking is noticed by the US authorities and they give you the GC soon!
But it is disgusting that you should stoop so low to get your GC!
“Have you got your arse fucked up in the U.S. and got your GC?”
Never..But I guess yours has terribly been..Commiserations.
“Otherwise, how this is not racism when they have specifically stopped payments from and to a reputed country?”
How is this racism? Please enlighten..
“This from an India!”
Yes..Start believing..
You brainless moron. Think, why Paypal is not even bothered to notify the users in advance. They are not even replying to the mails enquiring about the issue. Do you think the they will provide such a pathetic service for US customers?
Maybe I am brainless; but not a moron..
The issue is with Paypal India, and if we users didn’t receive a notification, it’s a lapse on the part of Paypal India..So call this pathetic customer service (which eBay Inc. is always known for) rather than any act of racism..
PS: Patriotic Indians, please show your faces..
Are you frustrated, because you are desperate to get a GC, and can’t get it.
I am an Indian, and I do not appreciate your profanity as it makes all of us Indians, look bad.
umm as one of MANY US users who have been raped by PayPal in EXACTLY the same way you are getting it now – yes Paypal can and does treat US customers the same way.
Check out these sites if you don’t believe me.
http://www.paypalwarning.com/
http://www.aboutpaypal.org/
or google I Hate PayPal
They are NOT a bank. They do NOT come under ANY regulatory agency at all – at least not in the US. And they can do whatever they want when ever they want.
I am totally surprised they decided to do this to India – an entire country, a large user of their services – it is surprising. It is horrible for you, it is tough for me to pay my bills that I owe to people in your country. It is wrong. It is disgusting. It is everything you can think to call it except racially motivated. Cause they’ve sure done it to US folks long before they did it to you. They also did it to some European countries long before they did it to you.
In short – you’re just the latest on the list.
None of the rest of us have been able to stop them. I sure hope you can figure something out that will knock them off their god like pedestal.
Troll!!
I guess it’s more to do with RBI’s (Reserve Bank of India) tracking of transactions which PayPal has refused over years.
It is a perfect example of why we need a better payment gateway.
Hey Apple, how about this business after iTunes Store?
well, I do not see it as racism. By calling it racism, you are suggesting that you do not know what racism is and you are taking the gravity (sad reality) of the word away from it.
Please refrain from using such words (or any word for that matter) unless you are sure about the meaning of the word.
While I am against this development, I do not think that Paypal is racist.
Africans have been sidelined by Paypal since times immemorial such that folks in Kenya have now resorted to more innovative ways such as Pesapal for online transactions. Indians and other countries may wish to emulate the example set by the Kenyans.
yes Clement; your suggestions are sane. We need to develop alternative payment gateways for Indians.
Hope someone comes up with such a solution.
@Keish, get a life! Paypal has a dev office here in India.
Alright. Then keep licking paypal sweet ass for a returned favor brother! It is because of Indian like you that the country always fails. It is all about ass licking to be in the white list of American companies.
Could it be high level of fraud involved? But there are other countries also that has the propensity of high level of fraud. Does anybody know if any other country was dropped from the list?
The issue is between RBI and paypal.
Paypal is trying to get the issue resolved as soon as possibl
RBI=Reserve Bank of India=Federal Bank of India
Ok so this is temporary! It will (and it should) get back to normal
I wonder if they are having some legal issues considering India may consider non-commercial transactions as a money transfer, which would fall under money transfer laws, whereas commercial payments would fall under a different set of laws.
Not only have my personal payments been reversed but also a couple of SERVICE payments!
Even the Money Withdrawal method is not working for Indian banks. Somehow, my money has got stuck with PayPal.
First India. Which (non-US) country’s going into the blacklist next?
IMO it’s probably the India government issue…
Definitely not isolated… I just experienced the same yesterday — Got money back that I sent to an Indian firm.
Sounds like some kind of regulation issue
It is not just the paypal transaction, withdrawal of funds to bank account also has suffered, looks like there is some issue with Paypal and RBI
I agree with Nirmal on this. Seems like this issue has something to do with RBI ands paypal. Though in the end we indian paypal users are suffering big time.
I agree with you Nirmal, this has had to happen, I guess..
A lot of problems started cropping up after RBI decided to go for compulsory Verified by Visa and MasterCard SecureCode verification for any online transaction involving electronic cards. Indian Paypal users were not able to verify themselves on Paypal after that. And now when Paypal provided Indians the option to verify their accounts using Bank account, this problem occured.
I wonder what will be the effect on Indian Freelancers and small biz who heavily rely on paypal service.!
I hired a web designer by the name of Gaurav Sharma, who claimed to be some big shot in a company called Moksh media. This guy offered me an un-believably low cost to build my client’s websites. I got nine sites done from this accomplished scam artist. I paid him for all the sites by pay pal and Western Union. After receiving all the payments, he hijacked all our sites and started to demand extra ordinarily high amounts. I reported him to the Indian authorities. I do not know what happened there. Do you think this pay pal stuff is a result of the acts of the scamers like Mokshmedia and Gaurav Sharma, who convey to their potential victims that they are in US and UK; but actually work from some small remote town in India and it is very difficult to get your money back if you get robbed.
No Zia, not because of these kind of issues paypal has stopped payouts.
The thing happened to you, this is matter of Cheap mentality..sometimes people Get frauded when then look for some cheap and down to earth rates, but they hardly knows that they may be falling in Trap. To be on the safer side for this. You should always try to adopt safe measures like escrowing the payouts, etc..
and one of the best method to play safe is…to get all the details of logins etc and to crosscheck details while paying out in full..
I run a small IT firm, technoport solutions (P) ltd, in Chandigarh , India and we always suggest our customers to change the login as soon as we are done with developments and all. And we have delivered smiles with work always to our clients, Crosscheck us on Google for our work.
So be safe and play safe is the rule of Virtual world.
Regards
Abhishek Bali
I think they have done this with their customers in mind.
It’s a question of integrity in electronic payments and it’s good new PayPal have realized there’s need to act quickly and responsibly
It *sounds* like PayPal might have issues with the appropriate licenses usually required in jurisdictions outside of the US for “banking services”… this is just a guess, but I can’t imagine why else they would need to pull this in such a manner at such short notice.
This is really bad… PayPal is reversing payments to web publishers, leaving ad networks like us in the lurch with a PR nightmare.
The issue is between RBI and paypal.
Paypal is trying to get the issue resolved as soon as possible
I agree with Amit. They should have notified all Indian users via email before policy updates. I couldn’t see any policy updates in their help center or TAC also . And its very surprising that still they haven’t made any official response in this matter. I hope TC would be able to sort out the issues associated with this.
I sent a payment to my programmer in India and clearly indicated it was for services yet the payment was reversed.
In addition, the funds were not credited to my PayPal account. On contacting PayPal about the whereabouts of my money they replied:
We have reviewed your account and it shows that we initiated the funds to
go to your credit card on 4/2/2010. This transfer can take 9-10 working
days but please allow up to 30 days, depending on your credit card company.
9-10 days but possibly 30!!! WTF. Where is my money for all that time? It didn’t take 9-10 days for them to take the money from my account in the first place. PayPal are a law unto themselves. I dare not complain to them for fear of having my account frozen- they do that you know. Without warning.
That issue is with the various banks, not paypal. Learn before you type.
Not sure why, but we’ve seen a lot of payment failures in the past to our indian customers.
We’ve internally speculated that maybe there’s a high level of fraud coming out of the area?
http://www.traderbots.com
Yet one more.
http://www.go4expert.com/forums/showthread.php?t=20869
Hi if anyone who works at PayPal is reading this: please introduce the PayPal service in Pakistan. I mean we have a population of 170 million, its a huge market. You guys stand to benefit a lot!!!!
Does that mean, Paypal is not available in Pakistan yet ? Very strange!
Yea, and that is good. Terrorists must not get access to PayPal.
So only terrorists live in Pakistan? You are from which country? USA? EU? Russia? Your’s got the worst of the Mafia Networks. So? Get yourself goats-ed you blunt idiot.
Mike you are right paypal is not available in Pakistan.
It may well be that the Reserve Bank of India wants to impose more restrictions on the way Indian accounts are handled which PayPal doesn’t want to.
Just a month ago, the RBI stopped any online transactions through debit cards which were not a “Verified by Visa” joint without notice and indefinitely.
It’s notoriously difficult for foreign financial service providers to operate in India.
The RBI and Indian Government make getting the licenses extremely difficult. Mostly to protect state owned banks from my understanding.
Looks like a license/RBI issue.
There must be something more here than just payment issued as personal payments. We received a single payment on 2nd Feb from rentacoder.com site and obviously they don’t make personal payments. As stated on RAC site viz. “Attention Indian coders who were paid via PayPal this payment period: PayPal is experiencing internal issues with payments to India. We sent all payments to them by Thursday February 4th (in the same manner we have done every month prior). Thursday 67 Indian PayPal users received an email from PayPal stating “We reversed this payment because we have stopped allowing personal payments to be sent to or from India. “. Despite the fact that the payments were not sent in this manner. Unfortunately today PayPal reversed an additional 137 payments (this time supposedly because of the shipping address). We are working with our PayPal rep and have escalated this issue to PayPal management, to determine if there is any way we can send these through PayPal. However, if we cannot, we may have to ask you to switch to another payment method. We will let you know more once we find out more.”
So as evident from the RAC message they didn’t sent the payment as a personal payment. Btw I knew something was wrong because whenever RAC sends a payment, paypal cuts some fee. For eg. last month we received $750.88 from RAC out of which around $29.58 were cut as a fee and the net amount we received was around $721.30. But this time around Paypal didn’t cut a single amount and it seemed weird though I was happy. But the happiness was short lived as I received a mail on 4th Feb that the amount has been returned back to the sender. But I had already transferred that amount into my bank account so my paypal account is in negative right now. Though the payment transferred to bank account displays as completed, the amount isn’t there in the bank account yet.
So my guess is due to some internal glitch the fees weren’t applied to the payments and because of which paypal reversed the transaction. But that raises few questions. If the problem was only with fees, paypal could have cut it afterwards rather than refunding the whole amount. So as others have pointed out in forums it is quite possible that RBI is definitely involved here. Another is why paypal allowed withdrawal to bank accounts if they were going to refund the amount. It seems the withdrawal has been delayed from 26th January onwards, I think paypal shouldn’t have allowed withdrawal to bank accounts at all if they were just instructed to return back the money. And doing this without any intimation says that the decision was taken at a very short notice.
But at least they needs to inform prior to this to all indian paypal account holders. Infact they reversed all payments sent through ’service’ option.
I don’t understand still if there is any kind of update in there software or policy why don’t they update or place an announcement ?? Why the bug reversing all Indian transactions? Does that one specially designed for indians? and Do they have testing team >??
@Robin: Thanks for acknowledging my mail
I would like to mention that paypal didn’t just reverse ‘personal payments’. They also reversed many payments that were made for services (through invoices).
The only services payments that were not reversed were those bought with ‘buy now’ buttons.
Correct me if I’m wrong, but aren’t there still exchange controls in India; how much money can come in/out. It’s a lot looser than it was, but I don’t think they’ve gone away…
Also iranian users need paypal service why we can not use paypal?