PayPal Blocks Personal Payments To and From India
February 8, 2010
(ChattahBox)—PayPal has abruptly stopped personal payments to and from India, to allow the eBay company to “address questions” about the service to the country. Before PayPal officials announced on its blog that payments were suspended, the blogosphere was already reporting that the company was suddenly reversing and returning payments to senders, when India was the source of the transfers.
PayPal offered few details on its blog post on Saturday, regarding the reason for such a drastic move:
“[P]ersonal 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.During this time, customers can still make commercial payments to India but merchants cannot withdraw funds in Rupees to local Indian banks. 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.”
But PC World surmises that the suspension is due to recent Indian measures enacted to prevent money laundering: “Last November, the Indian government introduced rules requiring financial institutions and other intermediaries to verify the identity of clients carrying out international money transfers.”
PayPal does not offer a guarantee of a user’s identity, but does have a verification policy in place, in which personal documents are requested to establish identity.
The suspension has hit thousands of Internet Indian freelancers whom depend on PayPal transfers for their livelihood.
Source: PC World