PayPal Announces Temporary Halt to Personal Payments to India
Transfers from PayPal Accounts to Local Indian Banks Also Stopped
Commercial payments will not be affected in the interim and Indian merchants can still charge their customers around the world and receive payment into their PayPal accounts as always. PayPal states that this temporary suspension of money transfers is being done to address concerns raised by customers and other business partners, however, the company does not detail the nature of the concerns.
Anuj Nayar, Global Communications Director for PayPal, said that personal activity involving Indian accounts was halted beginning January 28 and that the company is working quickly to resolve issues and resume payment and other transactional processing.
The move may be related to the Indian government's crackdown in November 2009 on international banking transactions. The government instituted new reporting and verification requirements on all banks and financial institutions to prevent international money laundering, a plague within the Indian financial community.
The suspension is likely to affect thousands of small Indian freelancers, including IT programmers, web designers and writers, who use personal rather than business accounts to receive payments from customers. Many of these Indian freelancers are lashing out at the PayPal announcement and its lack of detail and information. Upgrading to a business PayPal account requires additional fees and charges and not all freelancers may be eligible to do so. It is also unclear at this time as to whether PayPal will allow Indian account upgrades during the suspension.
The suspension was without warning and is resulting in financial difficulties for many Indian service providers, according to many forum and Twitter posts. Payments are still being processed out of Indian PayPal accounts without allowing money to come in to cover the payments, resulting in negative balances. Some notifications going out to customers trying to pay money to an Indian PayPal account are receiving notices from the company requesting that they try their payment again using the "Goods" designation under payment type. This is not resolving the problem in most cases.
Until the situation is resolved or more information is available, Indian freelancers will be scrambling to find other ways to get paid by their customers.
Sources:
PayPal Announcement
Published by Angie Mohr CA CMA - Featured Contributor in Finance and Lifestyle
Angie Mohr is a Chartered Accountant and Certified Management Accountant who has worked with thousands of business clients from home-based entrepreneurs to rock bands to celebrity chefs. She is also the auth... View profile
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16 Comments
Post a CommentIt makes sense that the crackdown by the Indian government may be the reason payments have been halted. I can imagine there are many people who are relying on their payments being available to them and are waiting for this to be lifted to so they'll have access.
Since we now know Paypal is infallible, this makes you realize the same could happen to any one of us. Those agencies requiring a paypal accunt for payment should surely now reconsider their methods offering other options to reciving and sending payments.
India now! What about the other counties then, Philippines perhaps? Thanks for the info ma'am Angie.
That's bad news to my Indian friends.
What a mess.
I certainly hope they get this straightened out soon! Good report.
Good coverage!
I too hope this gets resolved soon.
It is a nightmare here Angie, and you probably cannot even imagine the angst amongst Indian service providers who rely (relied - no more for sure!) on PayPal for receiving payments for work rendered online. PayPal has asked for some serious trouble and will surely get it very soon...the worst is there was no official communication prior to the upcoming outage, and even after the entire episode, there is nothing official put up on the PayPal website, not even on PayPal India - https://www.paypal.com/in, as you can clearly see yourself. Calls and emails to PayPal customer service are only producing vague responses, and we still do not have any clue as to when the money will be in. I personally have experienced reversals of my payments as well as non-receipt of withdrawals made to my bank account. The most frustrating is that I still do not know when (if ever) things will be back to normal.
feeling so helpless right now....so much of pays stuck because of this fiasco...:(