Yesterday night Paypal sends out a new mail to all of its Indian customers, a small policy change by paypal which will i say screw there entire online life/ business. In this e-mail, they just mentioned two new guidelines for Indian users, which will probably change the lives of some online entrepreneurs and most probably would screw there entire business world.

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

This guidelines/policy changes will 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”).


So in simple terms,

  • you can’t have any money on your paypal account in the future ( as all must be transferred to your bank account within 7 days of receiving it), which  means, from 1’st march 2011 you can’t use your Paypal balance to pay for hosting charges/subscriptions or to buy items on web, you will have to use Credit Card for that purpose. and
  • Also you can get only a amount of $500 per transactions. , but as a loophole to this policy, you can ask your money sender to send the money as parts of $500 per transactions.( so little problem in getting money)

Update: Paypal has raised the maximum transaction amount to $3000, as per the latest directive from RBI. So now you can receive maximum of $3000 for each transaction.

PayPal has created a FAQ page where you can get more information about this update. As lot many webmasters, online businessmen are using PayPal for receiving money from different countries and let them buy stuff using PayPal checkout. This limitation will definitely disappoint them as they will have to look for other Payment systems similar to PayPal.

The changes are just the latest to PayPal’s service in India, The company began blocking personal payments to and from India last January after regulators questioned whether PayPal payments should be regulated like wire transfers of cash. The ability to withdraw funds from a PayPal account in India, which was also suspended, was reinstated in July.

So, like to move from paypal and find an alternative, Sorry i think You CANT find any good/real alternative to paypal and if you find one it will also have to follow same RBI guidelines to transfer money to India. So i suggest better go for a CREDIT CARD.

The restrictions are up from 1st March 2011 , so got more than one month to decide what to do next? So make a decision fast.

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