EventHorizon1984 Log

PayPal India Farhad Irani Restores Business Bank Withdrawls But Hold On Personal Funds Remain

PayPal India Farhad Irani Restores Business Bank Withdrawls But Hold On Personal Funds Remain
28 February 2010
EventHorizon1984

Continuing the trend of terse press releases, Farhad Irani "Head of PayPal Asia Pacific" stated February 26th on the PayPal Blog that "bank withdrawals for settlements for exports of goods and services" are anticipated to resume on March 3rd.

The small catch for India businesses is this new PayPal (an eBay company) requirement: "you will be required to fill out a new field entitled ‘Export Code’ when you request a withdrawal". 

Predictably PayPal provided no details on getting an "Export Code", but Farhad Irani promises that on March 1st he will "be back in touch with specific instructions on how you can move your money into your bank account"

An India business can wait and see what gems Farhad Irani releases from the PayPal vaults, or perhaps they could take the time to read the PluGGd.IN article PayPal Resumes Local Withdrawls to Indian Banks, Here is how to get Export Code, and find the section titled "How do I obtain IE Code or FIRC?".  Or see the Techie Buzz article Import Export Code (IEC) For PayPal India Payment Withdrawals and view the "Useful Links" section.

At this point one should wonder what PayPal has NOT said about this self-inflicted problem.

Consider the spin released by individuals with no stated relationship to PayPal that 'only personal accounts were affected' beginning 27 January 2010.  And quotes from terse PayPal Blog public relations releases.

• "I’m writing to let you know that personal payments to and from India and transfers to local banks in India have been suspended"  Anuj Nayar, PayPal spokesman, 6 February 2010.
• "Only personal payments should have been reversed."  Anuj Nayar, PayPal spokesman, 9 February 2010.
• "We were hoping that our merchant customers would be able to start withdrawing their funds at their local bank by today, but it looks like this will still take some more time."  Farhad Irani, Head of PayPal Asia Pacific, 14 February 2010
• "thousands of Indian businesses who use PayPal" Farhad Irani, Head of PayPal Asia Pacific, 26 February 2010

Interesting how according to PayPal, business affected went from essentially none to thousands.

Should be very interesting to see what gets extracted from PayPal in the months to come.

Meanwhile we'll leave you with these gems from enthusiastic India PayPal blogger Amit Sinha of Little About:

• "resumption of service of PayPal, acclaimed e-commerce business allowing payments and money transfers to be made through the Internet and one of the greatest means of communications of Indians overseas."
• "millions of Indians have had a sigh of relief"

"Millions"??

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Apologies for the "transaction" typo in previous articles.

See Also

• PayPal India Service Hold Explained: 'We Don't Need No Stinking License'
• The PayPal India Suspended Transaction Services and Farhad Irani
• The PayPal India Transaction Holdup Continues
• The PayPal India Transaction Holdup

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"I never said it. Honest" ... "For a while, out of childish pique, I wouldn't utter the phrase, even when asked to.  But I've gotten over that.  So, for the record, here it goes: 'Billions and billions.'"
Carl Sagan

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Resuming local bank withdrawals to India

---

Hi. It is Farhad Irani again with a progress update. We have been diligently working with the RBI and our business partners to resume Indian bank withdrawals for the thousands of Indian businesses who use PayPal to sell their goods or services in the global marketplace.

I’m pleased to tell you that the RBI has now allowed us to resume bank withdrawals for settlements for exports of goods and services. We are currently making changes to comply with Indian regulations for settlements for exports of goods and services, and we anticipate that as of Wednesday, March 3rd, we will be able to resume the bank withdrawal service. As part of the changes, you will be required to fill out a new field entitled ‘Export Code’ when you request a withdrawal. This information is required under the current laws of India in order to identify the nature of cross-border merchant transactions. On Monday, March 1st, we will be back in touch with specific instructions on how you can move your money into your bank account. I will be posting another blog then.

I’d like to thank the RBI for working with us to get this addressed. We know this is an inconvenience to you and we appreciate your patience.

Moving forward, the RBI has told us that PayPal needs specific approvals to allow personal inward remittances to India, which we currently do not have. Until we get these approvals, personal payments into India will remain suspended. However, if you are an exporter, you will continue to be able to use the PayPal service for payments of goods and services. In fact, with the changes we are making to our system, PayPal is now set to be a more powerful engine for exporters in India. With purpose codes for export transactions and FIRCs (Foreign Inward Remittance Certificates), you should now be able to get the export related benefits you seek.

We know the past few weeks have been difficult and I would like to assure you that we have been working tirelessly to resolve the situation and restore our service. PayPal’s highest priority is to always ensure we comply with all applicable regulations everywhere we do business around the world.

Going forward, you can expect the same reliability from PayPal that you have enjoyed for all these years. I would like to thank you all for sticking with us and assure you of our best services going forward.

Farhad

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This entry was posted on Friday, February 26th, 2010 at 6:27 pm and is filed under Stuff for Everybody. You can leave a comment, or trackback from your own site.

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PayPal India Service Hold Explained: 'We Don't Need No Stinking License'

PayPal India Service Hold Explained: 'We Don't Need No Stinking License'
18 February 2010
EventHorizon1984

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.

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Apologies for the "transaction" typo in previous articles.

See Also

• The PayPal India Suspended Transaction Services and Farhad Irani
• The PayPal India Transaction Holdup Continues
• The PayPal India Transaction Holdup

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“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)
http://www.youtube.com/watch?v=HaxURLFn6jU

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The PayPal India Suspended Transaction Services and Farhad Irani

The PayPal India Suspended Transaction Services and Farhad Irani
15 February 2010
EventHorizon1984

We anticipated PayPal would make a statement this week regarding suspension of personal transactions into India.  PayPal remained predictable.  On February 14th, "Day 19", Farhad Irani the lead for the PayPal business in Asia Pacific posted a letter on the PayPal Blog.  A copy of the letter is attached to this article.

The letter contained Farhad Irani's "sincere apologies for the inconvenience", and not much else.  The else being two paragraphs regarding taking money out of a credit card for a "five USD fee".  Presumably to make up for the cash PayPal is holding.

And two paragraphs providing tacit confirmation that PayPal business accounts were affected;

• "help the thousands of Indian businesses who use PayPal"
• "We were hoping that our merchant customers would be able to start withdrawing their funds at their local bank by today, but it looks like this will still take some more time.".

Otherwise, as India colleagues surmise, many PayPal India customers will have to wait, according to PayPal, "months" for their money.

Remember The New York Times article?

India's Central Bank Stops Some PayPal Services
The New York Times
Heather Timmons and Claire Cain Miller
February 10, 2010

"“Providers of cross-border money transfer service need prior authorization from the Reserve Bank under the Payment and Settlement Systems Act,” a spokeswoman for the Reserve Bank of India, Alpana Killawalla, said in an e-mailed response to questions. “PayPal does not have our authorization.”

Currently some people with no official capacity to speak for PayPal are spinning 'it's the fault of the India government.  As we noted previously, when a business fails to comply with the law, it is the fault of the business.

While Farhad Irani became Singapore based "leader of PayPal’s business in the region and as a fellow Indian" in April 2009, how could someone with "more than 25 years of experience in retail banking" Not know about the India Payment and Settlement Systems Act, 2007?  Considering the Reserve Bank of India (RBI) posted the following public press release.

Date : 01 Sep 2008
Payment and Settlement Systems Act, and Regulations come into effect

The Payment and Settlement Systems Act, 2007 (51 of 2007) and the Payment and Settlement Systems Regulations, 2008 have been notified and have come into effect from August 12, 2008. The Payment and Settlement Systems Act stipulates that no person other than the Reserve Bank, shall commence or operate a payment system except under and in accordance with an authorisation issued by the Reserve Bank under the provisions of the Act.

All persons currently operating a payment system or desirous of setting up a payment system, as defined in Section 2(1)(i) of the Act should apply for authorisation to the Reserve Bank, unless specifically exempted in terms of the Act. Existing payment systems will cease to have the right to carry on their operations, unless they obtain an authorisation within six months from the commencement of the Act (i.e., 12th August 2008).

The Payment and Settlement Systems Regulations, 2008 detail the form and manner in which the application is to be made to the Reserve Bank for grant of authorisation. The Payment and Settlement Systems Act, 2007 and The Payment and Settlement Systems Regulations, 2008 are available on the website of Reserve Bank.

Ajit Prasad
Manager

Which means prior to January 27th, PayPal had six months plus almost a year to receive RBI authorization, and did not.

• "I’m personally committed to working closely and tirelessly with the Reserve Bank of India to get a fast resolution to this issue" Farhad Irani, 14 February 2010

One wonders what he was doing post April 2009?

With PayPal weeds also spinning authorization is time consuming and difficult for a United States company like PayPal to obtain, perhaps it would be helpful to see who is licensed.

It turns out there is an interesting document concerning companies certified by the RBI.

Date : 11 Feb 2010
Certificates of Authorisation issued by the Reserve Bank of India under the Payment and Settlement

Systems Act, 2007 for Setting up and Operating Payment System in India
The Payment and Settlement Systems Act, 2007 along with the Board for Regulation and Supervision of Payment and Settlement Systems Regulations, 2008 and the Payment and Settlement Systems Regulations, 2008 have come into effect from 12th August, 2008.

The 'payment systems' operators authorised by the Reserve Bank of India to set up and operate in India under the Payment and Settlement Systems Act, 2007 are as under:

Position as on January 31, 2010

Contained within is a list of compliant United States companies, and when they were certified.

• Cards Payment Network
• American Express Banking Corp, March 31 2009
• Master Cards International Incorporated, March 31 2009
• Visa International Services Association, USA, March 31 2009

• Cross border Money Transfer - in-bound only
• Buyindiaonline.com Inc, January 18 2010
• MoneyGram Payment Systems Inc., May 25 2009
• Royal Exchange (USA) Inc., May 25 2009
• Western Union Financial Services Incorporated, March 31 2009

Save for the new Buyindiaonline.com, it appears United States companies were able to be complaint, in 2009.

Perhaps as a friend noted, one or more of these PayPal competitors asked the RBI why in 2010 was PayPal operating in violation of the Payment and Settlement Systems Act, while they were compliant with the Act in 2009?

Probably a coincidence PayPal's owner eBay bans MoneyGram and Western Union payments.

Or not.

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Apologies for the "transaction" typo in previous articles.

See Also

• The PayPal India Transaction Holdup Continues
• The PayPal India Transaction Holdup

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'It’s more concerning that a company such as Paypal could “overlook” such an important regulation.
I think this is really telling of the level of people at the top within Paypal, surely some heads have rolled for this…unforgivable, and we have to trust them with our money, I wonder what else is being “overlooked”.'
Bigpoppa

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An Open Letter from Farhad Irani on the Situation in India

---

Hi. My name is Farhad Irani and I lead the PayPal business in Asia Pacific. As the leader of PayPal’s business in the region and as a fellow Indian, I want you to know that we are sparing no effort in ensuring that the present day inconvenience in not being able to process the bank withdrawal functionality in India for sellers is quickly and completely addressed. This is the single most important item for me and my management team. My sincere apologies for the inconvenience you must be facing.

I’d like to let everyone know that I’m personally committed to working closely and tirelessly with the Reserve Bank of India to get a fast resolution to this issue, so that we can continue to help the thousands of Indian businesses who use PayPal to sell their goods or services in the global marketplace. India is a very special market for me and your continued success is very precious to us.

We were hoping that our merchant customers would be able to start withdrawing their funds at their local bank by today, but it looks like this will still take some more time. I understand your frustration and want to let you know that we are doing everything we can to free your funds.

It has always been possible for sellers to request a check or withdraw funds to a credit card, and these options are still available from the Withdraw Money tab of your PayPal account. If you don’t have a credit card attached to your PayPal account now, you can add one under the Profile section of your PayPal account.  Before asking for a credit card withdrawal, please check with your card issuing bank to ensure that they can process it.

It usually takes five to seven working days for you to receive a check when you request a check withdrawal and PayPal normally charges a five USD fee. We are trying our best to help sellers during this difficult time and therefore will refund the check withdrawal fee back to your PayPal account within a week. I appreciate that this is not ideal, but please bear with us.

I’d like to let you know that I’m listening to your concerns. This is my direct PayPal email address: [email protected]. Feel free to send me an email.

Farhad

This entry was posted on Sunday, February 14th, 2010 at 8:23 pm and is filed under Stuff for Everybody, Stuff for Merchants. You can leave a comment, or trackback from your own site.

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The PayPal India Transaction Holdup Continues

The PayPal India Transaction Holdup Continues
10 February 2010
EventHorizon1984

PayPal has not been forthcoming about specifically why PayPal "has currently suspended P2P (person-to-person) transfers to and from PayPal India accounts".  The statement from PayPal spokesman Anuj Nayar, "We temporarily suspended these services to respond to enquiries from the Indian regulators" never answered the question why was it necessary to suspend services to answer questions.

Today The New York Times published this statement.

India's Central Bank Stops Some PayPal Services
The New York Times
Heather Timmons and Claire Cain Miller
February 10, 2010

"The Reserve Bank of India said it asked the company on Jan. 27 to immediately suspend PayPal payments to and from India as well as transfers to local banks in India. PayPal said it complied with the request the next day."

Indicating the Reserve Bank of India (RBI) "asked" PayPal to suspend payments.  Which is 'all well and good' save for this part of the article.

India's Central Bank Stops Some PayPal Services
The New York Times
Heather Timmons and Claire Cain Miller
February 10, 2010

"“Providers of cross-border money transfer service need prior authorization from the Reserve Bank under the Payment and Settlement Systems Act,” a spokeswoman for the Reserve Bank of India, Alpana Killawalla, said in an e-mailed response to questions. “PayPal does not have our authorization.”

The act, adopted in August 2008, regulates payment and settlement methods in India."

When a business fails to comply with the law, it is the fault of the business. Not the regulation.

Apparently the answer to why the suspensions occurred is PayPal's papers are not in order.

Since "August 2008"??

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See Also The PayPal India Transaction Holdup

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"Sometimes the only thing more dangerous than a question is an answer."
Rule of Acquisition #208

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The PayPal India Transaction Holdup

The PayPal India Transaction Holdup
10 February 2010 Amended
EventHorizon1984

There's been some spin generated abroad about PayPal holding cash from India.  Examples of disinformation being it's a rumor, or PayPal has nothing to do with the alleged rumor incident.

PayPal through Anuj Nayar stated for the record that (all) PayPal "personal payments to and from India and transfers to local banks in India have been suspended" and "We temporarily suspended these services".  There is nothing in writing by PayPal that they were forced to do so by another party.  Based on what PayPal has written, which we provide below, any conclusion at this point in time as to why PayPal is suspending all personal India transactions is speculative and borders on rumor mongering.

The actual ongoing PayPal event is the "suspension of certain transactions in India", which is not a traditional payment hold as PayPal defines it.

Specifically:

"PayPal has currently suspended P2P (person-to-person) transfers to and from PayPal India accounts, i.e. specifically those funds transfers that do not have an underlying exchange of goods or services."

[email protected], eBay India Team

Nevertheless it's interesting to observe the actions of a United States corporation (PayPal is owned by eBay) affecting customers within a large populous nation, by having all personal "payments to and from India" "suspended for at least a few months".

While this International situation lingers for what PayPal says is "at least a few months", hopefully not, here's a chronology sampler of prior and current events plus comments.

Notations

• The reference (REF) date is when a situation occurred, or when an official statement was released.  The same document may have multiple "REF"s because the document mentions different dates within.
• The REF day is set to California time.  The clock in India is 13.5 hours (give or take) ahead of California.
• The date/time format for India posts is Day-Month-Year.
• SandyPruins posted the link to the PayPal India thread (http://forums.ebay.in/thread.jspa?threadID=500002967).
• Our comments in the chronology will appear in this form.

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PayPay India Halt Chronology

REF January 20 2010

http://forums.ebay.in/thread.jspa?threadID=500002967&start=40

*deals  (1077 ) View Listings		07-02-10 00:50 IST	68 of 120
Dear Sushant, Thanks for the update but how long will it take?? If there are more delays - I foresee the following : We are receiving the payments and have received payment. My withdrawls are pemding from 20th Jan. Initially I thought its some temporary issue so I used up all my personal money. Nothing in hands now. Paypal money is pending. My orders are pending dispatch since one week. By next week, disputes will start coming. Paypal claims will start coming. I will have to refund (forcefully). If more disputes - less buyer satisfaction Low DSR. Low search standings - Low business. Why is this?? Ebay asks us for prompt service but who will be responsible for this delay? What about negative feedbacks if we get? With nothing in bank and nothing in paypal account if the claim is raised, paypal will deduct amount from CC. The CC defaulter cycle is a different story again. No fees will be paid and for non payment Ebay will suspend the account. Business closed... For you it could be easy to ask "Be Patient" Its already been 15 days when I initiated my first withdrawl. What do you think Sushant??

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This sample post gives the indication that suspensions occurred before January 28, and not as Anuj Nayar of PayPal stated beginning "Jan. 28".

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REF January 26 2010

http://forums.ebay.in/thread.jspa?threadID=500002967&start=40

bollywood2hollywood  (700 ) View Listings		07-02-10 11:23 IST	70 of 120
Hi All, I am also facing the same problem. 4-5 of my withdrawals are pending with paypal since January 26th. I have not received any mail tll now from paypal. God knows what will happen to our hard earned money. Regards, Ram Kishan.

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http://forums.ebay.in/thread.jspa?threadID=500002967&start=40

pc_gaming_store  (8892 ) View Listings		07-02-10 19:28 IST	73 of 120
Our payments are on hold too since January 26. The worst part is that it shows 'Complete' in the PayPal account but the funds have not reached our bank account. Our Account Manager was kind enough to give us notification of the same. We thank him for the same. However, PayPal never bothered to inform us. That is sad. This is a gigantic concern for Indian sellers. We hope eBay India actively follows up and not display the lethargic history of resolving problems that is so synonymous with them. By the way, PayPal customer support is completely unaware of this. If you call and ask PayPal, they will say it shows as 'Complete' and the problem is with our bank. Yeah right!

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REF January 27 2010

http://forums.ebay.in/thread.jspa?threadID=500002967&start=40

vishalsunil  (24 ) View Listings		07-02-10 01:05 IST	69 of 120
hello friends i also withdrawn a sum of amount on 27th jan & 1st feb but till today haven't received them in bank.How long will it take for things to get normal. Regards Vishal

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http://forums.ebay.in/thread.jspa?threadID=500002967&start=40

kothari.enterprises  (237 ) View Listings		08-02-10 00:50 IST	79 of 120
Dear All, Hello, This is very serious matter for all, who sells internationally and accept payments via PayPal. The bad news is that RBI has hold the money transfer facility from PayPal to Indian banks. No one has answer how long this matter is going to take to resolve and till that, there will be no deposits done by paypal. The PayPal and eBay saying that they have continued the commercial payments but I excused, I receive all my money via creating invoice. Not as gift or service, but still I do not got the funds into my bank account which I withdraw on 27 Jan, 30 Jan. 2010 to my current account. I am a premier business paypal account holder but still no money transfers were done to my bank account. It’s really horrible part of PayPal. Most of all sellers who withdraw fund after 26 Jan has not received the payment to bank accounts. Why not paisa pay started accepting funds globally? what’s the matter If we are doing an legal business through ebay, why they do not accept international payments on eBay.com sites? like PayPal? After all the invoice payments we pay monthly goes to eBay switzerland account. Than whats the problem for Paisa Pay to accept International funds? Like other gate ways - ICICI, Axis Bank, HDFC Bank all they accept international credit cards. If anyone has any updates please share here...... Again I request eBay team. Start accepting payments through paisa pay at eBay.com site for Indian sellers. We cannot depend any more on PayPal for our payments... Thank you. With Best Wishes. Kapil.K

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REF January 28 2010

PayPal halts certain payment transactions in India
AP
Sat Feb 6, 9:25 pm ET

"Nayar said the suspensions began Jan. 28. He wrote in a blog post that PayPal, which is owned by eBay Inc., hopes "to resolve the situation as quickly as possible."    

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Appears transaction halts began as early as January 20th.

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REF February 4 2010

PayPal Reversing Transactions of Indian Accounts
Tech Ground
Thursday, February 4, 2010

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Advisory: PayPal Reverses Personal Payments To And From Indian Accounts
Binary Turf
4 February 2010 ??

"The following is the standard email notification that the receiving parties are getting:

Hello <user>,

Your payment of  <xxx> 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"

"PayPal_Anuj
February 4, 2010 at 2:15 pm
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."

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Anuj Nayar's (PayPal's) response to the article is made through the ID "PayPal_Anuj".

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REF February 5 2010

http://forums.ebay.in/thread.jspa?threadID=500002967&start=40

[email protected] View Listings		06-02-10 12:57 IST	61 of 120
Dear All, PayPal is currently experiencing an issue in processing withdrawals to Indian bank accounts. As a result there may be some delays in withdrawals /random deposit for verification. During this time, PayPal customers can still make commercial payments to Indian sellers but the sellers cannot withdraw funds in Rupees to local Indian banks. PayPal is trying to resolve the situation as quickly as possible. PayPal is working actively on resolving the issue to be able to process your withdrawal as soon as possible; however, we do not have a specific time-frame to share at this time. We will be informing you all of any updates as and when we receive them from our PayPal team. Regards,

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Paypal India Outage - No Payments to or from India
manish
February 5, 2010

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PayPal's India Problems
Seeking Alpha
Tech Crunch
February 05, 2010

"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"

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REF February 6 2010

http://forums.ebay.in/thread.jspa?threadID=500002967&start=40

[email protected] View Listings		06-02-10 16:26 IST	64 of 120
Dear stylish_india, We are sorry to hear that the payment by your buyer has been sent back to the buyer while you have shipped the product already. PayPal has currently suspended P2P (person-to-person) transfers to and from PayPal India accounts, i.e. specifically those funds transfers that do not have an underlying exchange of goods or services. In this specific instance, because the buyer did not choose to select the option of either goods/services or eBay items and chose to pay directly – the transaction may have been identified as a P2P transfer by PayPal and therefore reversed. PayPal suggests that you should contact your buyer immediately and ask them to pay again, selecting - Goods - as the reason for payment. Since the buyer would have received the refund, they will know that you have not received the money and that you are justified in asking the buyer to re-send the payment. Such instances of buyers choosing the P2P option to make payment for an item are very rare as most buyers choose the goods/services or eBay item options. A member of our Customer Support team will be reaching out to you to understand and address your concerns. In the future, to ensure all your transactions with international buyers go through without any hindrance, we strongly advise all our sellers to: a. Request for money from PayPal using the ‘Create and Invoice’ option and NOT the ‘Create a money request’ option b. Inform the buyer to use the options present in the invoice sent by you to make the payment – so the payment is clearly identified as an exchange of goods and services Regards The eBay India team

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Personal Payments and local bank transfers in India
February 6th, 2010 at 2:13 pm

Hi, blog readers, it's Anuj from the communications team here.

I'm writing to let you know that personal payments to and from India and transfers to local banks in India have been suspended while we work with our business partners and other stakeholders to address questions they have about the service.

During this time, customers can still make commercial payments to India but merchants cannot withdraw funds in Rupees to local Indian banks.

We're trying to resolve the situaton as quickly as possible and we're really sorry for the inconvenience that this may cause our customers in India and around the world.

I'll update the blog as soon as we have more information to share.

Anuj

/*    

Note PayPal (above) mentions an interruption to an unknown number of business accounts, when Anuj Nayar states, "commercial payments to India but merchants".  The terms "commercial and "merchants" can refer to PayPal business accounts.

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PayPal halts certain payment transactions in India
AP
Sat Feb 6, 9:25 pm ET

"A spokesman for the service said Saturday that "personal payments" to and from India are being blocked. Transfers to banks in India are being suspended as well."

/*

PayPal India Reversed Personal Payments
Island Crisis, Mauritius News
Kurt Avish
2010/02/06

"While reports originally had it that the halt was only on personal payment transactions, we also noticed that payments for services was also affected."

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REF February 7 2010

PayPal India stops withdrawls, reverse payments
TameBay
Sue Bailey
February 7th, 2010 at 1:14 pm  

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REF February 8 2010

PayPal suspends service in India
ZDNet Asia
Liau Yun Qing
February 08, 2010

"In Indian blog Pluggd.In which focuses on start-ups, writer "manish" posted last Friday about an e-mail from PayPal saying "funds requested through PayPal India are being reversed to their senders, and users have no access to them"."

"PayPal, owned by eBay, boosted the online marketplace's performance in the fourth quarter of last year.

India's retail e-payment market is growing fast with the market forecast to reach between US$150 billion and US$180 billion by this year, according to a report by research firm Celent."

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PayPal India Reversed Personal Payments
Island Crisis, Mauritius News
Kurt Avish
2010/02/06

"Update 1: It’s already 8th February and yet no answer from Paypal to explain clearly what is happening. A reader contacted Paypal via phone support and shared the phone call record. You can download a copy here."

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We downloaded the recording, and it points out the technical problems involved when recording a telephone conversation.

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[email protected] View Listings		08-02-10 20:48 IST	88 of 120
Dear All, There have been questions that sellers like you have asked us either here on these boards or of the account managers/customer service representatives. Find below answers to these: • What are exact timelines for issue to get resolved? While we are working closely with the PayPal team to resolve this as soon as possible, we unfortunately do not have any specific timelines to share at this point. • Is PaisaPay also impacted? We would like to make it very clear that PaisaPay continues to be absolutely safe and there are no issues with paying through PaisaPay. PaisaPay remittances shall continue as per schedule. Also, PaisaPay accepts International credit cards. • Can I bypass PayPal for receiving payments from my buyers? Some of our sellers accept Postal Orders/Cheques and other forms of payment. Neither eBay India nor PayPal will be able to guarantee performance of these services in any way. We strongly advise all our sellers to use the ‘Request Money -> Send Invoice’ option to accept payment from their buyers. • What about negative ratings due to delayed shipping? We advise all our sellers to continue to list their items and ship to international buyers as they as always have. We would advise our sellers to not delay their shipments. • Should we continue to ship & receive money to our PayPal account? We advise all our sellers to continue to list and sell their items to international buyers without any fear. We foresee this issue being resolved very soon and would advise you to not alter your selling strategy. • Buyers who transferred money choosing Personal payment got reversed but I have shipped items, what if buyers do not pay again? In cases where the buyer has transferred your payment via P2P (person-to-person) method and you have shipped the item already, we would like you to first request the buyer to transfer the money again choosing the ‘goods/services’ option in PayPal. Considering the buyer has already noticed that his payment has been credited to his account, you would be right in asking for a payment again. If you have anymore questions, please feel free to post them here or reach out to your account managers. Regards, The eBay India team

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http://forums.ebay.com/db2/topic/Paypal/Which-Country-Is/520184002&start=45

sandypurins

(255)

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Posts: 38,736

Ignore

(46 of 64) Re: Which Country is next? Feb 8, 2010 12:02 PM

The following is posted on the eBay India forums... Last year in November, the Indian government had issued a notification (No No.13/2009/F.No.6/8/2009-ES dated 12 November 2009) for prevention of money laundering. Under this notification, the Reserve Bank of India (RBI) has asked all banks and financial institutions to maintain proper record of all transactions and verify identity and address of a non-account based customer or a walk-in customer. Payments to and from PayPal to its account users in India may also involve the foreign exchange maintenance act (FEMA) that has been under a cloud over the black money issue. On Friday, many renowned personalities had filed another petition in the Supreme Court seeking a direction to the Indian government to bring back unaccounted black money to the tune of around Rs65 lakh crore (Rs65 trillion) stashed away in banks abroad. Although PayPal provides money transfer service to and from India, neither the company nor its account holders pay any tax on the transaction. When Moneylife contacted the RBI to know about the PayPal issue, an official said,”We have no idea why this is happening. PayPal doesn’t come under RBI’s purview.” The question is then how can the country receive money, in foreign currencies, without any accountability and supervision? Some of the comments on techcrunch.com also say that many Indian account holders ask their payee to make the payment as a ‘gift’ rather than payment for services to avoid PayPal fees. One such comment said: “A lot of business must be transacted in India via PayPal—business done with personal transactions. So a money-hungry Indian government is aggravated at some perceived revenue loss (taxes, customs, etc.) and (has) put pressure on PayPal to stop the payments either directly or indirectly.” http://forums.ebay.in/thread.jspa?threadID=500002967

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Interesting point, abet the article uses a long stretch of logic to connect an event from 3 months earlier to PayPal's current situation.

Note the current official statement from the Reserve Bank of India (RBI); "We have no idea why this is happening. PayPal doesn’t come under RBI’s purview.”

The Reserve Bank of India functions in the same manner as the United States Federal Reserve.

Reserve Bank of India
http://www.rbi.org.in/commonman/English/scripts/home.aspx

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http://forums.ebay.com/db2/topic/Paypal/Which-Country-Is/520184002&start=45

sandypurins  (255)

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Posts: 38,730

(47 of 64)
Re: Which Country is next?
Feb 8, 2010 12:10 PM

beachgal707 wrote: Did you notice there was no reference made to the disposition of monies already being held? This is interesting because I'm sure India was not immune to the 21 to 180 day holds. The restriction applies only to personal payments. The 21-day eBay Item Hold does not apply to personal payments.

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Incorrect about "The restriction".

FACT:  PayPal stated, "customers can still make commercial payments to India but merchants cannot withdraw funds". 

I.E. PayPal business accounts, as noted by various eBay India businesses.  PayPal is affecting an unknown number of business accounts plus all personal India accounts involved in tranactions.

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http://forums.ebay.com/db2/topic/Paypal/Which-Country-Is/520184002&start=45    

sandypurins  (255)

View Listings

Posts: 38,736

(52 of 64)
Re: Which Country is next?
Feb 8, 2010 2:16 PM

It appears the Indian government has put pressure on PayPal to stop the payments either directly or indirectly.

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Well has sandypurins started a rumor; placing the blame on the Indian goverment for the PayPal India hold?  Of course sandypurins could not possibly know about a future event.

FACT: PayPal stated on February 9th "We temporarily suspended these services to respond to enquiries".

PayPal places NO blame on the Indian government.  Nor does PayPal state the Indian government forced PayPal to hold accounts.  PayPal states clearly "We", not "They."

Placing direct blame on the government WHEN PAYPAL DOES NOT inflames the situation and does nothing to help.  Unless the point in doing so is to get the Reserve Bank of India and the Indian government angry, and delay fixing the situation?

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http://forums.ebay.in/thread.jspa?threadID=500002967&start=0

[email protected] View Listings		09-02-10 01:18 IST	91 of 120
You are welcome Amitava! Go ahead and list without any apprehension. Regards

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Above from an eBay India employee.   

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REF February 9 2010

[email protected] View Listings		09-02-10 23:16 IST	120 of 120
Dear Community Members, We’re going to restore the amount of your recent attempted withdrawal back into your PayPal balance so that you can know your money is safe in your account. You should see the balance restored within 24 hours. Some of you may have already seen this restored amount reflecting in your PayPal accounts. In addition, you will see another reimbursement of any withdrawal fees charged. We will ensure that you are not adversely affected by currency fluctuations during the last week. This additional reimbursement(s) should cover the difference between the attempted withdrawal-amount and the amount-restored by PayPal into your accounts. Regards, The eBay India team On behalf of PayPal

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Update on PayPal situation in India
February 9, 2010 at 11:16 am

.

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It’s Anuj from the comms team here again.

Following on from my blog post on Saturday, I’ve received a number of questions about the situation in India and I thought it’d be best to simply answer the questions in a blog post.

Here are answers to the top questions I’ve received:

1. Why did you suspend local bank transfers and personal payments to and from India?

We temporarily suspended these services to respond to enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India.

We’re working with the regulators and our bank processing partners in India to get this resolved as quickly as we can. We realize that this is causing considerable inconvenience to our customers and I want to reassure you that this is a top priority for the leadership at PayPal

2. When will personal payments be turned back on?

The regulators recently let PayPal know about revised licensing rules that we are now actively engaged in securing. Personal payments to and from India will be suspended for at least a few months until we fully resolve the questions from the Indian regulators.

3. When will local bank withdrawals be available?

Customers should be able to withdraw their funds to a local bank within the next few days. In the meantime, we’re going to restore the money into the PayPal accounts of any customers in India who have initiated a recent withdrawal, so they know that the money is safe in their accounts. Customers will also be reimbursed for any withdrawal fee charges.

4.The PayPal reversal has left me with a negative balance. What shall I do?

If you bought something or transferred money out of your PayPal account to your bank account before we reversed the payment then you may be left with a negative balance.

If this was a payment for a purchase of goods or services, you should contact the sender and have him or her resend the payment as follows:

(a) click the Send Money tab, and

(b) select “purchase.”

If this was a personal payment, then the sender will need to find another payment method until we restore the service.  We’re sorry about this.

If you can’t recover the funds from the sender, you can bring your PayPal balance current by logging in to the PayPal account and clicking the “Resolve Negative Balance” link on the Account Overview page.

5. My payment was reversed but it was not a personal payment. What happened?

Only personal payments should have been reversed. Customers who believe that their payments were reversed in error should request that the payment be sent again by following the steps above (click the Send Money tab and select “purchase.”)

If you are still having problems, please contact PayPal customer support

I hope that this helps clear up some of the confusion around the situation in India and I’d like to take the opportunity to personally apologize on behalf of PayPal for the inconvenience that this is causing our customers.

Anuj

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Note the "Only personal payments should have been reversed", emphasis on "should".  As stated in posts here and elsewhere, some business accounts were impacted.  PayPal states above that error will be corrected.

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REF February 9 2010

PayPal's India transaction block could last months
AP
Tue Feb 9, 3:27 pm ET

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Addendum added to article.

See our followup The PayPal India Transaction Holdup Contnues.

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"I’d like to take the opportunity to personally apologize on behalf of PayPal for the inconvenience that this is causing our customers."
Anuj Nayar, PayPal Spokesman

"Apology accepted"
Darth Vader, Star Wars: The Empire Strikes Back (1980)

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