PayPal India Service Hold Explained: 'We Don't Need No Stinking License'
18 February 2010
With apologies to our India business colleagues, this will be brief because some of us are momentarily doing something else.
This is an excerpt from eBay's United States Securities and Exchange Commission Form 10-K, that eBay CEO John Donahoe signed on 17 February 2010.
"The Reserve Bank of India has asserted that PayPal’s offering of payment services to customers outside of India to send personal, non-commercial payments to recipients in India requires a license from the Reserve Bank. The Reserve Bank has directed the Indian affiliate of PayPal’s processing bank to suspend all withdrawals to the Indian bank accounts of PayPal customers for both personal and business customers. PayPal has suspended personal non-commercial payments to Indian accounts, and intends to apply for a license from the Reserve Bank of India, but PayPal could be subject to fines from the Reserve Bank for the period of operation without a license, and PayPal’s prospects for future business in India, both cross-border and domestic, could be materially and adversely affected."
Take note of the following:
- "period of operation without a license"
- "intends to apply for a license from the Reserve Bank of India"
eBay has stated PayPal is operating without a license in India. And PayPal has not started the license process yet. Merriam-Webster defines "intend" as "to have in mind as a purpose or goal." Which is not the same as saying 'applied for a license' or 'is waiting for license approval.' In other words, 'the check is in the mail.'
Worse case is PayPal arguing with the Reserve Bank of India, that PayPal does not need a license.
- "suspend all withdrawls to the Indian bank accounts of PayPal customers for both personal and business customers"
Needless to say that PayPal's first off-the-cuff response of the India transaction service halt only affecting personal transactions, "Personal payments to and from India will be suspended for at least a few months" and "Only personal payments should have been reversed", were in error.
- "personal, non-commercial payments to recipients in India requires a license"
eBay has stated the Reserve Bank of India stipulated PayPal needed a license for "personal, non-commercial payments." BUT PayPal suspended transactions for "personal and business customers" instead of just "personal" transactions.
If there is someone in charge at PayPal International who's actually awake and functioning, perhaps they should bother to read what eBay CEO John Donahoe puts a signature to quarter after quarter.
"Delay or failure to receive such a license or regulatory approval could require PayPal to change its business practices or features in ways that would adversely affect PayPal’s international expansion plans, and could require PayPal to suspend providing products and services to customers in one or more countries."
The eBay Inc. United States Securities and Exchange Commission Form 10-Q, signed by eBay CEO John Donahoe, 27 October 2009.
He spoke, PayPal didn't listen. PayPal dithered for almost a year and a half, and now "thousands of Indian businesses who use PayPal" are being adversely affected.
Interesting that it's three months to the day, 27 January 2010, where due to PayPal's ineptness in obtaining an India license, eBay's worse case scenario of "PayPal to suspend providing products and services to customers" occurred.
Enough already. PayPal get your license and get on with business.
But don't fret. The people in charge of PayPal India "intends to apply for a license from the Reserve Bank of India" REAL SOON NOW.
Apologies for the "transaction" typo in previous articles.
- The PayPal India Suspended Transaction Services and Farhad Irani
- The PayPal India Transaction Holdup Continues
- The PayPal India Transaction Holdup
“Badges? We ain’t got no badges. We don’t need no badges. I don’t have to show you any stinking badges.”
‘Gold Hat’ (Alfonso Bedoya), The Treasure of the Sierra Madre (1948)