PayPal Transaction issues in India for Small Business Remittances

PayPal (a part of eBay) came to India in 2006 & have 400+ employees in its Chennai office. But it continues to have remittance, withdrawal and other transaction-related problems with Indian Financial Authorities, freelancers and small business owners. Few months back, Paypal had blocked payments to Indian banks and users as per directive from RBI questioning cross-border money transfers. Mostly these guys let-go the big Swiss Bank depositors, shift focus and ban small businesses to gain Political & Bureaucratic mileage.

Recently PayPal has sent following alert to their users in India about a new policy change - stating that from July 29, they would not be able to conduct electronic withdrawal from their PayPal accounts.

In accordance with regulatory instructions, we would like to notify you about 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 if you are an India user.

From July 29, 2010 onwards, you will only be able to request for a cheque withdrawal of funds from your PayPal account. While 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.

To request for a cheque withdrawal:
1. Log into your PayPal account, click on 'Withdraw'.
2. Click on the 'Request a cheque from PayPal' link.
3. Enter the withdrawal amount and select your mailing address, then click 'Continue'.
4. Click 'Submit' to confirm your request.

In order to help you with this change and until further notice, we will refund the $5 USD cheque withdrawal fee to you for cheque withdrawals made on July 29, 2010 onwards.

Always wonder what the real issue is - with Media, Paypal and Officials going their own ways without learning and devising proactive measures to help small businesses in this country. Govt officials, Finance Ministry and RBI can easily track & find bad PayPal money or those who are making profits and not paying taxes. After all, Paypal deposits the money directly into an Indian bank, they can easily track, isn't it?

By the way, in most cases, these bad practices are either done by money launderers with direct or indirect support from the officials themselves. It is really difficult for majority of innocent business owners to get involved in anti-national activities for which they are concerned, if at all.