4 ms·
Indian Government Restricts PayPal
With effect from March 1st, Indian users cannot receive payments of more than $500 in your PayPal account. Moreover, you cannot keep or use any funds in your PayPal account. You can use your PayPal balance to make send money for any goods or services, and must withdraw it to your bank account within 7 days of the receipt.
- amitagrawal 16y agoSadly, the Indian Government is very slow on all things technology. This might come as surprise in a country whose core competency has been technology! If you don't believe me just visit any Indian Govt website and you'll quickly realize how light years behind we really are. No wonder hackers across the border show it to the world from time to time. As far as the PayPal move goes its a very bad move considering that not many own credit cards and there is no real way to pay money online for making instant purchases in India. Not that I like PayPal.
- desigooner 16y agoAt least understand the real reason (which someone aptly stated in one of the comments above, money laundering and such) before talking about things that have nothing to do with the decision.
- amitagrawal 16y agoMoney laundering? Who are you kidding to? In India money laundering takes place in broad daylight right under your nose and I'm sure Paypal's sure would be a drop in the ocean. If you know what I'm talking about. Literally.
- desigooner 16y agoOh I exactly know how it all works, hawala or otherwise. Again, the question is not if it's a move that will deter such laundering and so on. It's one of those things that you'd do to make people believe that you're up to something.
- statictype 16y agoCredit cards are not difficult to get. Anyone you can create a paypal account and get money transferred into it should be able to get a credit card.
- statictype 16y agoThe wording here is disingenuous. The RBI (which deals with taxes and money regulation in India) requires transactions above $500 to be reported. Also, any entity which keeps money and does transfers on demand over a certain period of time is deemed a bank and is subject to bank regulations. Paypal is not interested in being treated like a bank in India - that would mean paying interest on money they keep, among other things. So they decided to put in these new rules and blame it on the government.
- GiraffeNecktie 16y agoSadly typical of an Indian bureaucracy whose core competency has forever been to obstruct the free flow of money, goods and services, often for the purpose of positioning well-connected fixers to extract lucrative commissions for pulling the strings that would clear the "roadblocks"
- gnok 16y agoAs much as I agree with you on your observations of Indian bureaucracy, I think this case is slightly different. The RBI wants to treat PayPal like a bank and subject it to the same regulations as other banks (whether those regulations are fair or obstructive is subject for another discussion). PayPal wants to run around and be bank-like, but not really a bank.
- raganwald 16y agoPayPal wants to run around and be bank-like, but not really a bank. I agree this is true, but I say so in a completely neutral tone, devoid of any judgment. Running around and being X-like but not really an X is the entire point of creating disruptive products and services. For example, Amazon wants to run around and be bookstore-like, without really being a bookstore. This is obviously bad when they do bad things, and good when they do good things. But it's really the heart of the value proposition for a disruptive service.
- sandGorgon 16y agoThis is not entirely true - in the U.S., Paypal does ask for a SSN for large transactions, etc. India's equivalent KYC (know your customer) norms for using the PAN card are not followed. This is more of an anti money laundering thing than anything else. And in India's case, it is more often than not used to fund terrorist cells.
- yummyfajitas 16y agoThere is no shortage of banks. There is only one Paypal. If Paypal's customers wanted a bank, they would go open an account at one of India's many actual banks. Who exactly is being helped by taking away the Paypal option from consumers (besides bankers)?
- mhlakhani 16y agoThis may have happened in order to stop remittances. Indians abroad usually send fair amounts of money back home to support their families, and using Paypal they can avoid the official government taxes on those payments.
- statictype 16y agoMore likely it's used to keep track of money earned by people who do their business online.
- FraaJad 16y agoThis is not accurate. India has agreements with various countries around the world to avoid Double Taxation. I don't pay taxes for the monies I send to India to my parents because I've already paid taxes on my income in the USA.