PayPal to Stay Offline in India – Updates to Resume Indian Bank Transfer through PayPal

Online payment services provider PayPal today said it would take a few months to restore its India services, which was suspended last week.

In a blog, PayPal spokesperson Anuj Nayar said the service was temporarily suspended to respond to queries of Indian regulators, specifically questions whether personal payments constituted remittances into India.

“We are working with the regulators and our bank-processing partners in India to get this resolved as quickly as we can. We realise 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,” Nayar said.

The company said it “was actively engaged” in trying to secure a fresh licence after being informed recently about a change in rules. Nayar said personal payments to and from India would be suspended for at least a few months until PayPal had fully resolved the questions from the Indian regulators. PayPal said customers should be able to withdraw their funds from a local bank within the next few days.

“We’re going to restore the money into the PayPal account of any customer in India who has initiated (tried to) a recent withdrawal, so they know that the money is safe in their accounts. Customers will also be reimbursed for any withdrawal fee charges,” he said.

1 March 2010, Monday
PayPal has received the green light from the Reserve Bank of India to resume bank withdrawals for settlements involving exports of goods and services, but personal payments remains suspended.

In a blog post Friday, Farhad Irani, head of PayPal Asia-Pacific wrote that RBI has allowed PayPal to resume bank withdrawals for the exports of goods and services. The company is now making changes to comply with Indian regulations and “anticipates” it will be able to resume bank withdrawal service for settlements effective March 3.

However, personal payments remain suspended as PayPal still needs specific government approval to allow personal-inward remittances to India.

The e-payment services provider last month halted its services in the country as a result of India’s revised licensing laws.

4 March 2010, Thursday
PayPal suspended Indian bank transfer for the while to make necessary changes to their system. They will resume their services soon. Following is the message appears in PayPal account when we try to withdraw funds:

We are making some changes to our product in compliance with India regulations for settlements for exports of goods and / or services. During this time, we have temporarily suspended the ability to withdraw money to your bank account. We hope to resume settlements to enable you to withdraw funds to your local bank account without delays.

As part of the changes, you will also be required to fill out a new field entitled ‘Export Code’ when you request a withdrawal. This information is required in order to identify the nature of cross-border merchant transactions.

Our sincere apologies for the inconvenience you must be facing. Please be assured that we are working to resolve this as quickly as possible and we will make sure to keep you updated.

We hope, PayPal would fix their system and add a new “Export Code” field soon so that people in India can again use the services of PayPal to withdraw their funds to their Indian bank account.

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