PayPal India Personal Payments Outage – Solution
While PayPal is a trusted and a widely used payment processor, it has now created a lot of frustration among its Indian users, especially those users who initiated transaction in the past couple of days.
The problem started with one of the payment type – Personal Payments, an option available to all users while sending money, and ‘was’ available to Indian users until a couple of days back. Personal Payments have no fee associated which covers rent, owed money and other related personal payments. PayPal has now (of as writing this article) removed the personal payment feature from Indian accounts and all the transactions related to India that has happened over the past few days were reversed without any notice. Many users are now left with negative balance.
The reason?
There has been no official intimation to users, nor was their policy updated (screenshot), except that those users who transacted over the past few days were left with a email notice that PayPal would come with solution shortly. Till now, my inbox has no message related to the new policy update.
… personal payments to and from India and transfers to local banks in India have been suspended while we work with our business partners and other stakeholders to address questions they have about the service.
We’re trying to resolve the situation as quickly as possible and we’re really sorry for the inconvenience that this may cause our customers in India and around the world.
Update: Anuj, on the official PayPal blog, writes
We temporarily suspended these services to respond to enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India.
We’re working with the regulators and our bank processing partners in India to get this resolved as quickly as we can. We realize that this is causing considerable inconvenience to our customers and I want to reassure you that this is a top priority for the leadership at PayPal
The solution?
Personal Payments will remain unavailable until PayPal handles the situation and resolves the case. So users are left with the commercial/standard payment types – Goods, eBay items and Services/Other.
Enter recipients email address and the amount to be transferred, and select your payment type as Goods or Services/Other, enter the shipping address to proceed with a successful transaction.
Be informed that even International transactions to India (that use Personal Payments as payment type) will be reversed. Bank Transfer/Withdrawal through NEFT has been suspended until the issue gets sorted out.
Payments sent as Sevices/Other will also be reversed. That is what the major outcry is all about. Freelancers getting paid for services like remote server administration and software development are paid for using the services option and paypal has reversed those as well. Infact even payments made for goods are being reversed now this is something they had said shud be done for services….. I think RBI has woken up and is playing spoilsport. Withdrawals to bank accounts are also blocked. So effectively a major part of Indian s/w outsourcing is being held at ransom by the government and it’s archaic/stone aged understanding of business. Terrorist will fund activities regardless of such blocks but the inconvenience and loss of livelyhood to genuine freelancers is immense.
As per PayPal, commercial/standard payments (Goods, eBay and Services/Other) are available to Indian users. Personal Payments and Bank Transfers have been temporarily suspended.