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« December 2010 | Main | February 2011 »

January 29, 2011

RBI forces Paypal to amend user agreement

The Reserve Bank of India (RBI) has forced Paypal to amend its user agreement for its Indian customers. According to the changed policy, an Indian Paypal user

- cannot send/receive money for personal transactions.
- cannot receive amount greater than $500 USD.
- cannot send money using Paypal balance (only credit cards)
- must withdraw all the paypal balance within 7 days of receipt.

I wonder what is the logic behind enforcing credit card rule for sending payments? May be the Indian banks felt threatened because of the growth of Paypal.

It will also be interesting to see how Paypal manages the 7 days withdrawal rule. They will be flooded with NEFT and cheque withdrawal requests.

With so many changes, this is surely going to impact Paypal's growth and popularity in India. Unfortunately, unless the banking and foreign currency rules in India are modified, this change will remain with us for a foreseeable future.

Posted by manish at 11:30 AM | Comments (0)

« December 2010 | Main | February 2011 »

January 07, 2011

Payoneer suspends services in India

Payoneer announced yesterday that they are temporarily suspending POS (point of sale) transactions in India. Probably the ATM transactions will be suspended pretty soon.

The move comes after the Indian regulators (viz RBI) objected to the use of these cards in India.

Payoneer offers prepaid Mastercard that can be used to withdraw money at ATMs or used in the shops (POS) throughout the world. These cards also work online. It is a popular method of remitting money from various freelancing websites like Elance, Odesk, etc.

It is easy to get a Payoneer card without much documentation. Probably that is the reason why RBI is concerned about these cards and have blocked them in India.

Payoneer says the problem is temporary and that they are working with the authorities to enable the services soon.

This block is similar to the one imposed on Paypal few months back. Paypal resolved the issue with RBI and IncomeTax authorities by making it mandatory to provide PAN (Permanent Account Number) when you open a Paypal account.

Posted by manish at 02:40 PM | Comments (0)