Update : Feb. 24th 2010 – There are many users who have reported that XOOM has stopped payments to India if you fund it using PayPal. As you can see in comments I tried calling the official numbers which never connects so consider XOOM as not an option from today. This news is still not verified by me and will soon do verification myself
Recently all the payments to Indian Bank accounts from PayPal have stopped and the reason for the same is RBI has asked PayPal to follow some cross country transaction laws.
Many people including me started to think that PayPal have started some malicious activity. No doubt the way PayPal handled it was really bad and till date we have not got any official email broadcast of the actual situation. I did expect an email from them but they have at least updated the Official PayPal blog with the same. Many of us are not aware of that but yes they have done that to an extent.
And I quote from it
We temporarily suspended these services to respond to enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India.
And also here
Customers can still make commercial payments to India but merchants cannot withdraw funds in Rupees to local Indian banks.
But the latest from Farhad Irani who leads the PayPal business in Asia Pacific was really encouraging for me and specially
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.
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.
So there is one option for Indians to withdraw funds to your bank account.
I have tested this myself and check arrived at my place in Indian currencies and the funds are cleared and deposited into my HDFC bank account.
I know many are aware of Xoom and this is also a nice way to withdraw funds from your PayPal.
Xoom is more like a Wire Transfer to India. It is quite fast and can deposit to almost any bank account in India. Xoom is fast, easy and safe to transfer your PayPal fund to your bank.
Now there may be many questions I can think of and so first let me answer them.
Can you show us some proof of Xoom working?
When it comes to new thinks we all need proof and so yes I have done a 1000 USD transfer myself and money is deposited in my bank account.
What are the Fees for XOOM?
For Bank Deposit of $1,000 they actually charged me $29.99 but then actual fees were almost NIL. How I will explain. As we all know that PayPal USD to INR conversion is always lowest but Xoom offers much higher rate for the same and so actual amount of $1029.99 if I would have withdrawn using PayPal would have been quite close to 46,250 INR on the day I initiated Xoom payment.
So mentally PayPal has no fees and Xoom has but if you have amount close to USD 1100 with Xoom you will get more money into your bank account.
In India Personal Payment is not an option anymore and that is not going to be an option for some time to come. This means sending $1 to anybody who wins the competition or who puts a good question is not an option in PayPal for me. So he may be charged 33% as fees for receiving $1.
If you have more questions do post them in comments and as I have done lots of talking with the PayPal guys for my withdrawals I am sure I can answer quite a few of them.
Further Reading …