Why Paypal changed things for Indians? An ex-RBI employee gives some facts!
By Wismay
@Wismay (2037)
India
January 29, 2011 11:41pm CST
PayPal is not telling the complete truth about the changes they are going to make for Indian Paypal users from March 2011.
Here are some reasons given by an ex-RBI employee:
[b]First of, let us take a look at why PayPal cannot keep your money with them for more than 7 days and then delve into the $500 restriction they will be putting into place.
Because if PayPal keeps the money with them, they have to be regulated as a bank (and any institution that does it have to do the same) and PayPal does not want that to happen. Any entity which provides on-demand payments have to be regulated as a bank as per RBI rules, this is mandated because if they hold money for more than 7 days they have to provide users with interest. With this new change PayPal is basically circumnavigating this regulation so that they don’t have to answer questions to any government about how they conduct business and why they charge an exorbitant amount to customers to accept payments whilst continuing to not giving users interest like every other bank in India does.
Their (Paypal) business heads know how to circumnavigate against a country’s policies and that they are adamant about accepting regulations because that would mean that they have to cut down on their charges and also ensure that they do follow all guidelines laid down for a bank.
All entities who bring cash-flow into India have to basically report transactions above $500 to the RBI and government. PayPal is basically just circumnavigating around this mandate by restricting the payments to $500. Once they do this, they have no obligation to report it to the RBI or the Indian government.
If PayPal accepts the RBI regulations they have to be treated a bank and they are hell bent on not doing it.
Right now PayPal is a monetary service but they are not like say SBI, ICICI, HSBC or Citibank and do not have to adhere to the rules. Once you become a bank, you have stringent rules which PayPal doesn't want to follow.
[/b]
You can see the original article here: [techie-buzz.com/tech-news/paypal-rbi-guidelines-flouting.html]
So basically, PayPal doesn't want to be regulated by anyone!!
And they are changing policies to suit themselves and their business at the cost of Indian users.
What you think about this?
Please share your views!
1 person likes this
5 responses
@tigeraunt (6326)
• Philippines
30 Jan 11
hello wismay,
this discussion explained it better. but still here is a question that seems unanswered.
will something happen to the money of the indian mylotters money in paypal if they are not able to transfer it within 7 days after they get a notification from paypal?
ann
@rameshkumaar57 (5908)
• India
30 Jan 11
If you are not transferring your funds within 7days, you tend to loose all your money. It is simple as that.
1 person likes this
after all the work you did? it is so unfair.
ann
@Wismay (2037)
• India
1 Feb 11
@tigeraunt
@rameshkumar
Thanks for your contribution to this discussion!
Happy Mylotting!
@allen0187 (59827)
• Philippines
30 Jan 11
thanks for sharing the info wismay. really opened up on how paypal operates as a business. can't really fault them for doing this. like you said, paypal introduced the changes to 'circumvent' the current rules of the country and not to be under any restrictions whatsoever. the article is a good and insightful read. i would definitely be looking for a work around myself in order to 'circumvent' paypal's new rules. as to what those steps are, no idea really but i am not affected by this rule.
i feel for our indian users here in mylot. hopefully, this is sorted out soon and the restrictions are lifted.
@allen0187 (59827)
• Philippines
1 Feb 11
is this in effect already wismay? have indian mylot users felt the sting of this policy first-hand? hopefully, they can share what had happened and also share what they did to go around this issue?
i think sharing insights for this one will help. after all, we are all in this together whether we are affected or not by this new paypal policy.
@nainesh1 (1656)
• India
1 Feb 11
I would raise my minimum payout at mylot from $10 to $50 and reinvest the money I get from onbux without taking it out and I don't have any problem to keep my neobux balance grow in neobux . so all an all I would make sum of $50 in few months then get it cashed out.
The worrying factor for me is I have joined a few sites where I can't keep money in the site like palmbux, cashium and I have some $1 cashout sites too. I hope paypal don't raise limit of min $10 for bank transfer.
@strawberrychocodahi (4817)
• Philippines
31 Jan 11
What I think of is that Paypal is an e-commerce and it does follow what rules does a country applies. That is India, they are so fuzzy about so many things and RBI needs to implement such in order to protect what you may call FUNDING of terrorist if they think that is the case.
So why blame or ask Paypal about their service when in fact it was your government that implement such rules to make life of an online earner more difficult. In every country there is a rule, so Paypal would only depend on that rule and follow, no more, no less. This is not just an issue with Paypal, it is your Government and your Banking system.
@Wismay (2037)
• India
1 Feb 11
@strawberrychocodahi
@snowdoll487
Both of you have valid points. And here no one is blaming PayPal. It is just that anyone who is involved in money transaction service in India has to follow the rules of RBI.
Not only Indian users but PayPal itself will get affected if they stop working with Indians as Indian online users are large in numbers compared to most of the countries where PayPal is not available. Otherwise PayPal would have stopped working with Indian users by now!
And if PayPal is not there then Indian users have to use other ways, and one cannot say that without PayPal no online earning! Other payment processors will grab this opportunity for sure, Neteller and Alertpay are good alternatives. Of course, it will be inconvenient in the beginning but people will get used to it!
Happy Mylotting!
@thanks1961 (7033)
• India
30 Jan 11
As for paypal, it is their business and they must be bothered on their profit and minimum liability. In view of this, they will periodically amend the policies in line with government guidelines. Again, if there is any inward remittance to paypal to a user, they have to transfer to their personal bank account means, they will get immediate transaction charges quiet often. Here also, paypal is benefited and the users are sufferers.
Thank-s
