Personal transactions to saty shut for a few months: PayPal
11 Feb 2010
PayPal which had abruptly suspended personal transactions for users to and from India, says its services would remain suspended for ''at least a few months'' as it tries to resolve certain problems with local regulators.
The ban came last Saturday and caught PayPal users in India by surprise. It stems from uncertainty over whether personal payments constitutue ''remittances,'' or money sent home by people working abroad according to the company's blog.
"We temporarily suspended these services to respond to enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India," PayPal said.
PayPal said it was in the process of sorting out the issue with regulators in the country as soon as possible, but personal payments to and from India would remain suspended for at least a few months until it fully resolved the questions from regulators.
"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," the company said.
According to analysts, the problem may have started with PayPal's marketing pitch that promotes the service as a way to send money abroad. The campaign, "As low as $1.50 to send $300 to countries like India", may have raised concerns of Indian regulators, they say.
The suspension has hit some professionals who receive payments from clients abroad for the services they render from India, such as software development.
PayPal processed upward of $4 billion in payments in the Asia Pacific region in 2008 according to a PayPal spokesman. The company transacts the maximum business in the region in Australia. It processed more than $60 billion in payments worldwide in 2008.