International money service PayPal suspended their services to India this week without notice.
The service was halted on Saturday. The decision shouldn’t affect commercial payments but it does mean that any non commercial ‘personal’ payments won’t go through and currently local merchants cannot withdraw money through banks into Rupees although that at least should be resolved in the next few days.
Speaking on the PayPal blog, Communications team member Anuj stated:
“I’m writing to let you know that 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.”
The service has also seen thousands of people in India having their recent transactions reversed.
The decision wasn’t explained in more detail until several days later; PayPal were forced to suspend Indian payments due to the regulators in India questioning the legality of the service, in particular the question of whether personal payments constitute remittances into India or not.
Anuj commented:
“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.”
However, recent news has suggested that PayPal service in India is unlikely to be reinstated for at least a couple of months, perhaps longer.
PayPal have advised customers that they should be able to withdraw their funds from local banks in the next few days and those who have seen their money ‘vanish’ after a recent withdrawal will see the cash reappear in their PayPal accounts shortly. Payment can be remade by using the ‘purchase’ options on PayPal but personal payments are still locked tight.
Thousands of freelancers use the personal payment system on PayPal and rely on the money to live. Many work online as freelance web developers, programmers and content creators and use PayPal are their primary way to receiving money from clients. While other options are available, using a less popular service means reducing the number of potential clients.
Overall, a very messy situation that doesn’t look like it’s going to be resolved any time soon.
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