I got this email from PayPal today morning
Dear Shabbir Bhimani,
As part of our commitment to provide a high level of customer service, we would like to give you a 30-day advance notice on changes to our user agreement for India.
With effect from 1 March 2011, you are required to comply with the requirements set out in the notification of the Reserve Bank of India governing the processing and settlement of export-related receipts facilitated by online payment gateways ("RBI Guidelines").
In order to comply with the RBI Guidelines, our user agreement in India will be amended for the following services as follows:
- Any balance in and all future payments into your PayPal account may not be used to buy goods or services and must be transferred to your bank account in India within 7 days from the receipt of confirmation from the buyer in respect of the goods or services; and
- Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction.
We seek your understanding as we continue to employ our best efforts to comply with the RBI Guidelines in a timely manner.
We regret any inconvenience caused to you and hope the advance notice will enable you to plan your future use of our services accordingly. For further information, click here.
If you have any questions, please contact PayPal customer support by logging into your PayPal account and clicking on "˜contact us' at the bottom of the page. We sincerely thank you for your patience and continued support.
The PayPal Team
In short it means now you cannot use PayPal balance for anything but to transfer it to your bank account and then use your bank cards to pay. This means you loose quite a lot on the Forex.
Check out the FAQ's.
I see the major Impact on -
- Cannot use your PayPal balance to buy anything and so your Domains and hosting payments should be done through Credit Cards now instead of using PayPal. This means you should be choosing your host who accepts non-PayPal payments because paying through a credit card using PayPal means lot more charges.
- For all small payments you cannot use PayPal and if you use them you may need to withdraw the funds within 7 days of receiving payment. This means you pay withdrawal fees of 50 Rs for each withdrawal of below 7000 INR. Again Minimum withdrawal amount is $10 in PayPal and it is unclear how they will deal with it.
- I am not sure why PayPal restricted for $500 but for export RBI says it is $25000. See this
- As an individual you cannot pay any other Freelancer outside India for doing your work and if you want to be doing you have to pay the Forex fees of paying through your credit card using PayPal.
What are your thoughts on the same.