Breaking: RBI Raises PayPal Receiving Limit to $3000 for Indian Accounts

PayPal has just sent an email stating that the receiving limits for Indian accounts has been raised to $3000 per transaction from the previous $500.

In the recent past, PayPal and RBI have been problematic for Indian users. First off they started out by suspending Indian Payments for which I wrote a long and personal rant. Secondly, they asked Indian users to add PAN (Permanent Account Numbers) and also stopped electronic withdrawals in India for a brief period.

Thirdly, they stopped PayPal India users from buying anything with their PayPal account. This created a huge problem for millions of PayPal users and I had the chance to talk to a past RBI employee and find out the facts about why PayPal was being restricted.

However, after almost 18 months of turmoil, PayPal and RBI seem to have patched up and they are now allowing Indian users to receive up to $3000 per transaction from the earlier limit of $500 per transaction. In an email sent to PayPal India users, PayPal says:

Dear user,

We are pleased to inform you that the RBI will now allow you to receive export-related payments of up to USD 3000 per transaction into your PayPal account, effective immediately.

We sincerely thank you for your understanding and patience over the past few months as we continue to implement the changes required to remain compliant with the RBI guidelines. With these changes completed, you can confidently accept PayPal for your cross-border transactions with our global buyer base of over 100 million active accounts in 190 markets worldwide. We look forward to continuing to support your export business through our global online payment platform.

To comply with the RBI guidelines, you must add a Permanent Account Number (PAN), Purpose Code and local bank account to your PayPal account in order to continue receiving export-related payments.

Users still need to have a purpose code for receiving payments and you can find that in a Purpose Code for PayPal PDF we had created earlier.

PayPal also recently launched auto withdrawal of funds from Indian accounts and then removed the withdrawal fees as well. However, it also messed up by screwing up validation of PAN numbers for Indian users.

All in all, this sounds like a pretty sweet deal from RBI and PayPal to solve the issues Indian users faced and should be helpful to young entrepreneurs and freelancers to get their money hassle free.

Speak Asia – Scam? Bank Accounts Closed

Speak Asia is a Singapore based market research company that organizes online surveys for various products and companies. It launched it’s services in India sometime back and there are a number of ads you see on TV and newspapers. People wonder, how Speak Asia works and how it makes money? Is it real or a scam?

Speak Asia charges Rs.11,000 ($250) to register. Once successfully registered, a set of surveys are provided to answer. For every survey you complete, you get paid Rs. 500 ($11.36)

Speak Asia

Speak Asia currently offers 3 different methods to register.

  1. Email a scanned copy of your income statement which states that you earn over $1000 from one of the top 20 survey companies.
  2. Apply for a test in English. The examination fee is $60. The topics will range from general knowledge to comprehension. You can give test at Mumbai or Singapore.
  3. Pay $120 for 26 issues of online surveys or $220 for 52 issues and get direct entry to Speak Asia.

Here’s the catch. The first two ways of signing up for the program makes some sense as they are accepting quality panelists, but the third way to sign up for the program sounds fishy. Anyone can register by paying the fee and I wonder how they can compromise quality for $220?

Here are some interesting facts and things that have been happening in the last few days.

Speak Asia’s website states that they have their main office in Singapore and do not have an registered office in India yet. Wonder how they’re still offering services in India? The documents listed in Speak Asia’s website are rubbish. No legal documents of the company are available online.

Headline Today conducted a background check on Speak Asia sometime back and found out that the owner of Speak Asia is not based in Singapore and lives in Tax haven of British Virgin Island.

Interestingly, IndiaToday reported that the ownership of Speak Asia conforms to a typical offshore structure where multi-layered waterfall structure is created to hide the actual owner.

On 27th May, United Overseas Bank, based in Singapore has closed all accounts of Speak Asia.

Our bank account in Singapore has not been frozen… we are only moving our company account to another bank. We are approaching and evaluating various other banks in Singapore from where we will soon be able to disburse the payments to all panelists,Speak Asia said in a statement.

Here’s a complete analysis done by Vijay at India Forums. Interesting. Must read!

For over a year, Speak Asia has collected Rs. 11,000 from lakhs of people assuring them of high returns within months, but not sure how far it is true. If you’re planning to register, then I suggest you not to do so. Looking at the analysis, it can be scam. You never know!

Please share this across with all your friends and alert the ones who have already registered.

http://www.thehindu.com/news/national/article2054826.ece

Why Is PayPal Screwing Indians? An ex-RBI Employee Tells Me The Facts

So as you already know by now, PayPal is busy screwing small Indian SMBs and independent freelancers who rely on the service to send and receive payments. This is definitely not the first time this has happened, and will definitely not be the last one.

In a recent email and blog post, PayPal said that they will be restraining Indian users from using the money in their PayPal account to purchase anything along with putting a stipulation that they have to withdraw the money within 7 days. In addition to that, they have also said that Indian users cannot accept payments more than $500.

Many users have been blaming the Reserve Bank of India (RBI) for this, but most of them haven’t done any fact-checking as such and are just blaming it because they feel that PayPal has no faults whatsoever. So I sat down with one of my roommates who has been an ex-RBI employee who has worked with them for 7 years to understand why this is happening.

Let me take you through this. First of we take a look at why PayPal cannot keep your money with them for more than 7 days and then delve into the $500 restriction they will be putting into place. Here is the actual conversation edited in some form by me without changing the details.

Me: So PayPal says that they cannot keep the money in their account for more than 7 days? Why is this happening.

RBI-expert: Because if PayPal keeps the money with them, they have to be regulated as a bank (and any institution that does it have to do the same) and PayPal does not want that to happen. Any entity which provides on-demand payments have to be regulated as a bank as per RBI rules, this is mandated because if they hold money for more than 7 days they have to provide users with interest. With this new change PayPal is basically circumnavigating this regulation so that they don’t have to answer questions to any government about how they conduct business and why they charge an exorbitant amount to customers to accept payments whilst continuing to not giving users interest like every other bank in India does.

Me: So you are saying that PayPal is practically f*cking all Indians.

RBI-expert: No I wouldn’t say that, but I would say that their business heads know how to circumnavigate against a country’s policies and that they are adamant about accepting regulations because that would mean that they have to cut down on their charges and also ensure that they do follow all guidelines laid down for a bank.

Me: Ok, so I see that they are screwing their customers with a hefty fee and now this. I do understand that they want to make money, but what is about $500 transaction limit.

RBI-expert: Well, once again this is a government and RBI mandated thing. All entities who bring cash-flow into India have to basically report transactions above $500 to the RBI and government. PayPal is basically just circumnavigating around this mandate by restricting the payments to $500. Once they do this, they have no obligation to report it to the RBI or the Indian government.

Me: So you are basically saying that these new changes by PayPal is just about screwing the RBI, Indian Government and people who use their service.

RBI-expert: Well, these are the rules. I will simply say this. If PayPal accepts the RBI regulations they have to be treated a bank and I can see that they are hell bent on not doing it. They are basically finding ways to get over it because once they become a bank they come under a different set of rules. Right now PayPal is a monetary service but they are not like say SBI, ICICI, HSBC or Citibank and do not have to adhere to the rules. Once you become a bank, you have stringent rules which I don’t think PayPal wants to follow.

So as you can see, from the above conversation which came through from a horse’s mouth, I feel that PayPal is basically cheating the RBI, Indian government and Indian users because they don’t want to be regulated. All I can say is that we need to boycott these services, check out some PayPal alternatives.

Though these things may make my statement that RBI is in no fault at this sound untrue, but you have to understand that these rules have been in place in 2004 and some of them since 1999. So saying that RBI is screwing PayPal is basically wrong. PayPal has been floundering these rules since they came into India and the RBI is just reining them in. They might have given them an option to change to being a bank or stop flouting the rules laid down by the Government of India. I believe you will understand what PayPal chose to do.

PayPal has also been blocked or regulated in countries such as Japan, Brazil, USA among others. Some of these countries have put in similar restrictions on in place which were also done last year in India. So it does not really make sense to say that RBI is the only one who is regulating PayPal.

This post has been updated with additional inputs and facts.

PayPal Resumes Local Bank Withdrawals in India

It seems that the folks at PayPal have been diligentlyworking for freelancers and other online merchants in India. In an email (and a related blog post) PayPal says that they will be ready to resume local bank withdrawals by March 3rd, a few days shy of Holi:-

Today, we are happy to announce that the RBI has allowed us
to continue local bank withdrawals for settlements for exports
of goods and services.   We are currently making changes to
comply with Indian regulations for settlements for exports of
goods and services, and we anticipate that, as of Wednesday,
March 3rd, customers will be able to use our
bank withdrawal service.

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It seems that once the changes are in effect, any local bank withdrawal needs to have an Export Codefield filled out before the transaction is completed. This will enable the bank to identify the cross-border transaction’s nature. The necessary details will be provided in an email again on March 1st.

However, the situation on personal payments is still bleak as talks are on between PayPal and the Reserve Bank of India.

[T]he RBI has told us that PayPal needs specific
approvals to allow personal remittances to India, which we
currently do not have.   Until we get these approvals, personal
payments into India will remain suspended.

Here’s to hoping that it will get solved within a few months!