Paypal does not have authorization in India

RBI (Reserve Bank of India) said, Paypal does not have authorization in India to provide cross-broder money transfer.

Paypal needs authorization to operate a cross-border money transfer service, under country’s Payment and Settlement Sytems Act, as per the RBI.

In a Tuesday blog post PayPal said that they has suspended the personal payments to and from India following RBI directions until it resolves questions from Indian regulators.

“We temporarily suspended these services to respond to enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India,” the blog post said.

Although PayPal notified its customers, that personal payments to and from India, as well as transfer to local bank has been suspended, and it will be started soon. Although customers can still make commercial payments to India, but merchants can not withdraw funds in rupees to local banks. Paypal said customers should be able to withdraw funds to a local bank within a few days.

PayPal notified users on Saturday, through another blog post, that personal payments to and from India, as well as transfers to local banks, had been suspended. Customers can still make commercial payments to India, but merchants can’t withdraw funds in rupees to local banks, the company said.

This move has caused inconvenienced to a number of PayPal users in India including outsourcing companies, free lancers, and online retailers.

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