Paypal woes continue for Indian users. Early this year in February, Paypal had completely stopped withdrawals to India, be it for Individuals or Business citing RBI regulations.
However, few days later they had resolved local bank withdrawals for Business users, where the user has to enter something called as Export Code, which would identify that the transaction was for cross-border merchant transactions, and not P2P money transfer.
However, the problems with regulatory authorities in India seem to have re-surfaced and Paypal has stopped Electronic Funds Transfer to Indian local banks. However, cheque withdrawals are still available.
Here is the notification that Paypal has sent in an email to all Indian Paypal users as well as posted it on their Paypal blog:
Hi everyone, it’s Dickson Seow, from the Corporate Communications team. I’d like to give you an update on PayPal accounts for our India users.
In accordance with regulatory instructions, there will be a change in our withdrawal functionality in India starting on August 1, 2010. At present, you can request for either an electronic or cheque withdrawal of funds from your PayPal account. From July 29, 2010 onwards, you will only be able to request for a cheque withdrawal of funds from your PayPal account.
We sincerely apologize in advance for any inconvenience caused from this change and we are working hard to restore the electronic withdrawal service. In the meantime, we are bringing this matter to your attention so that you can plan your future withdrawal activities accordingly.
Our India users can find the cheque withdrawal process here. In order to help you deal with this change and until further notice, we will refund the US$5 cheque withdrawal fee to you for cheque withdrawals made on July 29, 2010 onwards.
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.
Again, we apologize for any inconvenience caused from this change in our withdrawal functionality. We will provide ongoing updates to you here. We thank you for your attention and patience as we work tirelessly to resolve this situation as quickly as possible.
This does put a lot of Paypal Individuals users as well as Businesses in Limbo, as Cheque payments not only take time but also attract some charges. Paypal has also not mentioned anything about whether and if the Electronics Fund transfer will resume.
We will probably just have to wait to get more details on this.