PayPal is a popular online payment facilitator which is being extensively used by individuals and small companies for international money transfers, mainly of small amounts.
Paypal’s popularity increased mainly because of the simplicity with which one could transfer a few dollars to others. Those who didn’t have credit cards or international bank accounts relied heavily on paypal to make payments or earn money on their international assignments.
Suddenly, Paypal India has introduced a policy change, creating an outage which renders Paypal totally useless for small time users. As per their new policy, Paypal has stopped allowing personal payments to be sent to or from India, which means PayPal can be used only for business transactions, that too where there’s some proof of delivery for goods or services (such as shipment tracking number/billing address or other such evidences)
The worst thing according to me is Paypal has enforced this policy change without any prior notice or warning and is autonomously back dating the policy, enforcing it on already completed transactions. Pay pal is reversing such transactions done in recent past and causing huge inconvenience/loss to the stake holders who might have already delivered the services for that money. It is like your bank taking back your monthly pay deposited by your employer. Ideally PayPal (or any company for that matter) should have announced in advance that "From so and so date our new policy will apply", so that everyone could have made appropriate plans.
I was indirectly associated with an event management company (Name withheld has I've not taken permission), which sold tickets of one of its show (scheduled to happen in Chennai) online. Ticket buyers would pay via PayPal, will get a unique code showing which they could collect the printed tickets at the venue of the show. PayPal never hinted about its policy change, all tickets were sold and when organizers of the event wanted to withdraw money (which amounted to over 5 lakh rupees, as thousands of tickets were sold), PayPal blocked the account demanding that organizers show some proof, such as FedEx shipment number, that they’ve delivered the ticket. Physical delivery of tickets, for local customers, that too with reputed courier services that give tracking number makes the whole idea of online ticket booking useless. Imagine the inconvenience organizers will face when they're unable to withdraw money earned from ticket sales and they've to pay for the hall, artists, advertisements and sundry other expenses
I’ve bought 2 tickets for the show for the above event via PayPal and I didn’t get any communication from PayPal that they’re having a payment dispute or reversing the transaction so that I can buy tickets separately. In other words, PayPal has neither given my money to event management company, nor returned it to me. But the money I earned from some other source has been reversed from my account, I am not sure if it is returned to the sender.
Many individual, including this writer, got an email from PayPal which reads
Your payment of xx 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
Paypal hasn’t offered any explanation for this sudden change of policy and wordings suggest this could be a temporary measure. One good guess is that the personal type of payment, which is free of any charges, is being misused by companies and paypal needs to figure out how to prevent mis-use of this free service by corporates/professionals who should be paying a small fee for Paypal's money transfer services. Techcrunch has quoted a paypal official (Anuj Nayar, Director, Global Communications) saying :”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.”
Most of online payments could be for activities like donations, or payments for some services (like an article submitted etc) for which there’ll be no physical goods to deliver. Paypal is used in cases where either sender or receiver is a small time operator or individual who cannot afford standard payment options like overseas bank account/credit card payment gateways etc. With pay-pal virtually shutting doors for them in India, soon they’ll be forced to identify an alternate payment mechanism (necessity is the mother of invention) and that will render paypal useless.
Money is a very sensitive matter and trust is paramount. Service providers like paypal should not be playing with other people’s money, without giving adequate warnings/time for their policy change. I am sure several individuals and companies world wide are put to inconvenience by this. If the trust and faith is lost it is very tough to regain.
I’m just watching the developments to see what happens. Image from okmu.info
Work around /solution for Paypal India users:
Senders can select "Goods" as an option under "send money for" section, provide shipping address and proceed. But paypal might ask for some proof of delivery if they suspect this feature is being mis-used.
Related: Be an alert Consumer * Helium.com Policy Change impacts APAC users * Policy change @ Vegetable shop *





