If you landed here, you've probably heard about the new rules that RBI has enforced on Indian PayPal users.
If not, here's the deal -
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:
I gathered from many sources that balance would be lost if not withdrawn within 7 days. This appeared totally ridiculous to me because money can't just disappear. If I have $5 (less than $10) in my account, I wouldn't be able withdraw it. What will happen to this money? Will PayPal gobble it up? Will it be given away to charity? Unlikely. So, where will it go?
I decided to shoot a mail to PayPal, asking them to clarify. Here is what they had to say -
Me: I'm an independent musician from India. I setup my sales so that money is credited to my PayPal account as soon as a customer buys a song. I understand that the 7 day rule is by RBI but the $10 limit and a transaction fee of Rs.50 enforced by PayPal India will take away a good percentage of earnings. Please help me in this regard.
Paypal: Hello, my name is XXXXXX from PayPal Customer Services. I understand that you are concerned about the new policy that was implemented for Indian account holders. Please be advised that were still updating our system and at this time you can still keep the funds on your PayPal account for more than 7 days. Once we complete our system update, Indian account holders will no longer have minimum withdrawal limit, and fees for transferring funds of less than Rs.7000.00 will be waived.
I understand that it is difficult, however it is how the system is currently set up. Please be advised that these concerns are being taken into consideration by PayPal and we will research on this to further update the service to provide better and more convenient transactions for you.
We are committed to making your experience with PayPal pleasant and rewarding. Thank you for choosing PayPal.
Sincerely,
XXXXXXX
PayPal, an eBay Company
In a different conversation, PayPal confirmed that PayPal balance will be automatically transferred to the linked bank account, if a manual transfer is not initiated within 7 days of receiving money.
As you might have guessed it, this is great news! What surprises me is that they didn't put this piece of information on their website. Infact, they should have this on their FAQ considering the amount of traffic this particular topic drives. That apart, it means that Paypal India is still the best option for freelancers.
If not, here's the deal -
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.
I gathered from many sources that balance would be lost if not withdrawn within 7 days. This appeared totally ridiculous to me because money can't just disappear. If I have $5 (less than $10) in my account, I wouldn't be able withdraw it. What will happen to this money? Will PayPal gobble it up? Will it be given away to charity? Unlikely. So, where will it go?
I decided to shoot a mail to PayPal, asking them to clarify. Here is what they had to say -
Me: I'm an independent musician from India. I setup my sales so that money is credited to my PayPal account as soon as a customer buys a song. I understand that the 7 day rule is by RBI but the $10 limit and a transaction fee of Rs.50 enforced by PayPal India will take away a good percentage of earnings. Please help me in this regard.
Paypal: Hello, my name is XXXXXX from PayPal Customer Services. I understand that you are concerned about the new policy that was implemented for Indian account holders. Please be advised that were still updating our system and at this time you can still keep the funds on your PayPal account for more than 7 days. Once we complete our system update, Indian account holders will no longer have minimum withdrawal limit, and fees for transferring funds of less than Rs.7000.00 will be waived.
I understand that it is difficult, however it is how the system is currently set up. Please be advised that these concerns are being taken into consideration by PayPal and we will research on this to further update the service to provide better and more convenient transactions for you.
We are committed to making your experience with PayPal pleasant and rewarding. Thank you for choosing PayPal.
Sincerely,
XXXXXXX
PayPal, an eBay Company
In a different conversation, PayPal confirmed that PayPal balance will be automatically transferred to the linked bank account, if a manual transfer is not initiated within 7 days of receiving money.
As you might have guessed it, this is great news! What surprises me is that they didn't put this piece of information on their website. Infact, they should have this on their FAQ considering the amount of traffic this particular topic drives. That apart, it means that Paypal India is still the best option for freelancers.




