PayPal Stops Personal Payments To and From India

In a jolt for Indian users of PayPal, they have decided to stop personal payments that are sent to Indian accounts and originate from one. The issue has quickly escalated and snowballed because several web publishers rely on PayPal to receive online payments from advertisers and clients.

The shock was even bigger when PayPal started reversing payments received by Indian accounts and sending them back to the people who sent them. Here is a email that Indian publishers have been receiving after PayPal reverses the payments.

Hello Publisher,

Your payment of  XXX has been sent back to the sender of the payment. 

We reversed this payment because we have stopped allowing personal payments to be sent to or from India.
If this was a payment for a purchase of goods or services, and not a personal payment, then you may contact the buyer and have him or her resend the payment as follows:  (a) click the Send Money tab, (b) select "Goods," and (c) provide a shipping address.

If this payment was a personal payment such as a gift, then we have requested that the sender find another payment method until we restore personal payments to and from India.

We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience.

Thank you,
PayPal

TechCrunch was able to get an update on this issue from Anuj Nayar, Director of Global Communications at PayPal, he said:

I can confirm that personal payments to and from India have been suspended while we address some questions from our business partners. You can still make commercial payments. We’re trying to resolve the situation as quickly as possible and we’re sorry for any inconvenience this may cause.

However, no matter what the problems were, PayPal definitely did not handle it amicably. There was absolutely no intimation to users about this issue and people who withdrew the money from their accounts now face negative balances. We will try and get more information about this issue and update you, however, it is high time we see more PayPal alternatives rather than be a victim of such unwarranted actions.

31 thoughts on “PayPal Stops Personal Payments To and From India”

  1. Some of the people say it's an glitch and payments are not actually reversed. I am not sure about that.. I have made a re-payment to a guy as my acc showed payment reversed, which means I MIGHT have made him twice and couldn't figure out if I did the right thing or not. Overall system is screwed and has screwed us :(

  2. Truly disgusting to see this abrupt development. After close to a year on an affiliate network I managed to earn a good sum of money which has been reversed without intimation :( How is affiliate payment personal? Doesn't it come under services??

  3. I had requested a big amount to get transfered in my local bank. With this issue all my payment had got blocked. Its neither in my PP account nor did it reach to my local bank account. I am shattered. It was my hard earned of one month. Can anybody tell me if I ever get my money back?

    1. @Serin – The issue should be sorted out soon. However, I urge you to contact the people who sent you the money and tell them about the issue.

      You can ask them to use the Goods/services method to send you the payments again.

      1. Hey Keith,

        I just wanted to confirm if you or anyone you know actually got the money credited into your account successfully after asking the client to select goods/services while making the payment?

        I asked my client to select Goods or Services this time and transfer the money again but it got reversed as well . Quite strange!

      2. Thanks for your information. I did get the money back to my paypal account but less than what I requested to get transferred, may be because of the fluctuation in conversion rates. Now, the question is will I be able to transfer my money into my Indian bank account or should I try different options? What are the various options that I can try out?

        1. No, You would not be able to withdraw money to your account. I requested a withdrawl to my HDFC business account on 28th Jan and it got reversed on 9th Feb. I got NO email from Paypal informing me of the sceneario.

          I am now not sure how to withdraw money from my Paypal account.
          Is USD Check an option? anyone tried that? As I dn't have a Visa card.

    2. Hi Serin,

      payment will be back in your paypal account. I had same problem,but I can see payment reversed into paypal now.

      Mehul

  4. Same scenario. Now I have to depend on the dubious good will of a customer who had paid me after much follow up. He probably sees this as a sign from heaven that he doesn't need to pay for services he used.

    It was sitting in my account. I needed the money urgently. I withdrew. Nope. Nothing. It got reversed. I got a negative balance and a big fat nothing got credited to my bank account.

  5. Paypal done this without any intimation and how can paypal reverse money from our account once they have credited.

    If they have stopped personal payments to and from India. then they have to block the option by sender side that he can not

    send payment in India.

    I got USD 577 in last few days. I have also requested to withdraw money in bank account. See what happens !!!!!!

    Paypal canceled all my withdrawal requests and credited USD 542 and reversed to senders.

    I got credit of USD 542 instead of USD577. Even if withdrawal requested are not completed (Deducted exchange rate fees). But

    how can they deduct exchange rate fees even if transactions are not completed and money are sent back to senders.

    Now I have negative balance. And I like that balance will become positive by deducting from credit card.

    Who can tell that paypal is safe way payment method ????

    No steps are taken in front of paypal.

  6. Hi.,

    I was a freelancer and verified PayPal user. Recently I had withdrawn $300 from my PayPal account to my personal bank account. Out of this $80 was a personal payment from one of my client. PayPal Reversed this transaction, as a result my account gone to negative balance. So PayPal reversed my Bank deposit. Now due to this reversal, I lost about $20 from my account. (PayPal charge 3.9%+$0.30 for every transaction which involves multiple currencies.)

    Again, now my service provider is feeling that I gave him a full return and thinking that he don't need to pay again. Even after a one hour discussion, he was not agreed to send money again.

    Totally, I lost about $100 because of PayPal ridiculous activity. It was like PayPal robbed my account.

    I want to make a complaint on PayPal for refund of the charges collected from me. Please advice me how to do that.

    Is there any better alternative to PayPal which has the Indian Rupees as holding currency.

    1. I face the same issue here, i am a freelancer and had received a payment on 2nd of February. on the 3rd i decided to withdraw £210.00 to my bank account in India. and the transaction records say that transaction is complete according to paypal. the on the 4th of Feb i received a notification abt the reversal of the payment and my account went in negative balance.

      There are Three thing i wud like to know.
      One why has this withdrawn money not reached my bank account and if paypal has not released it from their end then why is my account gone into negative.

      Second If paypal has released this money then why has it not reached the bank account and where is it ?

      Third- how long will it take for them to resolve this payment sending issue to India

      1. Hi Kunwar.,

        PayPal has some issue with India customers/banking system. They are not revealing it.

        When they are reversing any payment, your account should have that balance in your account. But as we already requested that money to bank, inorder to reverse that amount, they also reversed bank withdrawl. That is the reason for all..

        Hope you got it.

        1. yes i understood the part the tht they reversed the withdrawal. but what i don't understand is why is my paypal account still in negative if they have reversed the withdrawal. then money has no reached me in my bank and paypal has it still as the reversed the withdrawal. then why is the paypal account showing negative

  7. Hi all,

    The issue is not yet resolved as on Feb 7th night…

    Here is the recorded file of a conversation with a Paypal customer care employee on February 7th, 2010..

    The issue will be resolved only by Tuesday/Thursday and they are not providing exact reason for the issue…Download and hear it…6MB mp3 file
    http://filekeeper.org/download/shared/paypalcall….

  8. Issue not yet resolved:

    8th February, 8-30 PM

    Just made another call to Paypal customer care and had a chat with Supervisor too. They are having technical issues and developers are working on it. They are telling that issue will be resolved this week.

    Here is the new recording of Paypal Chat:(8-02-2010) 10.1 MB
    http://filekeeper.org/download/shared/Paypalcall_

    The chat with the supervisor has more clarity.

    Mahesh

    1. Till mon 8th feb, due to reversal of my 200 USD, it was showing -ve balance of 200 USD. Today on 9th Feb it's showing -14.98 USD, I dont understand the reason why ? Is this also a temp balance status and wud be eventually made to 0 or I wud end up paying for paypal's mess ?

  9. My 200 USD payment was reversed and it was showing -200 USD negeative balance till Monday 08 Feb. Today, it's showing a -ve balance of -14.98 USD. I don't understand why this -ve balance and I have not received even a cent into my bank account. And like the previous payment, is this also a temporary -ve balance and would be made to zero or due to mess up of paypal, I would end up paying this amount for paypal's mess ?

  10. This is so frustrating. I had withdrawn an amount X from my Paypal account and made a personal remittance to the ICICI Bank account. It had been around 15 days since I heard from them. When contacted this is what they replied:

    I checked your PayPal account and I do see here the withdrawal you made on February 10, 2010 for Rs.XXX INR. Right now, the status of the withdrawal on your PayPal account is already completed, and this is because the funds were successfully taken from your PayPal account balance. Now, I am sure that you are aware of the issues that we have had with bank transfers to Indian accounts. Now, basically right now, we will not be reversing the funds back to the balance anymore as we are still trying to have it posted on the bank instead. Rest assured though that the funds are safe and will be credited to you.

    In the meantime, I would recommend that you check and visit http://www.thepaypalblog.com for updates on this matter.

    We hope you understand our situation and thank you for your patience.

    —-

    What crap? Now they say they are NOT going to reverse the funds back too…. If Paypal takes 6 months (or even more) to get this issue of personal remittance sorted out, we have the funds blocked. WHAT ARE THEY DOING WITH THE MONEY?

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