PayPal Replaces Export Code With Purpose Code For Indian Users
By on March 1st, 2010

Let’s be honest, for the past few weeks, PayPal has been playing around with the sentiments of Indian users, who relied on it to send and receive payments online. First of all they stopped personal payments to and from India and failed to notify users about it.

PayPal Logo

In the weeks that passed they came up with a lame explanation, and later said that they would restart bank withdrawals in India, but users would require a Import Export Code. Now, in a new development, which is good news for PayPal India users, PayPal has said that Indian users will no longer require an Export Code and will instead have to use a "Purpose Code".

Purpose Code and More Details

Purpose Code is a code which will allow the banks you withdraw money to, to identify the nature of transaction. There are several different Purpose codes which can be used based on the type of transaction for which you received money in your PayPal account.

For example, if you exported any goods you will have to use the purpose code P0101 or P0104, if you provided services in Information Technology, you will have to use the purpose code P0801 or P0802 or P0803.

So now users will no longer have to use the earlier suggested Import Export Code for which they would have had to apply for a IEC number with the Government of India. You can download a PDF file containing all the purpose codes in the download section below.

New PayPal Withdrawal Process

For any new withdrawals after March 1st 2010, users will have to provide a Purpose Code while withdrawing money to their bank, this purpose code may be different for different transactions.

However, based on the amount of withdrawal, users will also need to furnish additional documents such as invoices or goods receipts. The max ceiling above which these documents will be required has not been made clear by PayPal yet, but in my experience, this amount should be Rs 50,000, based on my dealing with Indian banks who require users to add the PAN number whenever they are making deposits of 50K or more.

Receiving Payments in PayPal

Sadly, PayPal has not yet enabled the Personal Payments option for Indian users, however, users can receive payments in the following ways.

  1. Using the Pay for Purchases (Goods or  Services) tab
  2. Completing PayPal checkout at your website
  3. Responding to PayPal Request Moneyinstructions (invoices)

Download Purpose Code Table

I have created a PDF file which contains all the Purpose codes, their categories, description and when you should use it. You can download the PDF file for easy printing from here. Please do not link directly to the PDF file, if you want to, link back to this post.

More information and FAQ can be found at the PayPal blog.

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Author: Keith Dsouza Google Profile for Keith Dsouza
I am the editor-in-chief and owner of Techie Buzz. I love coding and have contributed to several open source projects in the past. You can know more about me and my projects by visiting my Personal Website. I am also a social networking enthusiast and can be found active on twitter, you can follow Keith on twitter @keithdsouza. You can click on my name to visit my Google+ profile.

Keith Dsouza has written and can be contacted at keith@techie-buzz.com.

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