Paypal withdrawals for Indian companies impacted

Last month Paypal had sent out an email to all its customers stating that starting 29th July it will not be able to support online payment withdrawals to bank accounts in India. Due to this inconvenience, they were also ready to provide 5USD for any cheque withdrawal requested on or after 29th of July as a measure of compensation to its users.

Within two days of sending the notice, they sent a follow up mail that they were able to continue with the service. In this follow up mail they also clarified that they will continue to give the 5USD refund for the cheque withdrawals.

We have used Paypal in the past to receive payment amounts made by overseas clients. So we waited to try this out to experience what is new in the changes they have made to the withdrawal process.

Not any major changes. The only two changes we noticed were:

– During withdrawal, there is now a mandatory question on ‘What is this payment received for’. I am guessing this step has been introduced to provide more accountability in the system for any foreign revenue that comes into the country.

– There used to be an option to send the money in US Dollars or in Indian Rupees. Now there is no such option and it just gets converted while we send. I remember making a mistake in the past when we withdrew the money as Indian Rupees and later realized that our auditor complained that those payments did not qualify as foreign remittances. I am guessing this step is introduced to prevent banks from manipulating with the rates.

In any case, looking at this change as well as the Ultimatum to Blackberry by the Indian Government, it is quite obvious that the Indian Government authorities are tightening the processes around the online aspects of doing business in India, which is a very good sign of progress in the right direction.


Message sent by Paypal team on 29-Jul-2010:

We’ve received good news.

You can continue to enjoy electronic withdrawals just as you did before.

While we have received your appreciation for the advanced notice and the refund of the cheque processing fee, we also have heard loud and clear that you highly value the ease-of-use of our electronic withdrawal service. Our customers are our number one priority and we are working tirelessly to improve our service.

Thank you for your patience and in appreciation for your continued support, we will still provide the $5 USD processing fee refund for any cheque withdrawals made from July 29, 2010 until further notice.

For any enquiries, please contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page.

Thank you,
The PayPal Asia Team


Original Message sent by Paypal Team before 29-Jul-2010:

In accordance with regulatory instructions, we would like to notify you about a change in our withdrawal functionality in India starting on August 1, 2010.

At present you can request for either an electronic or cheque withdrawal of funds from your PayPal account if you are an India user.

From July 29, 2010 onwards, you will only be able to request for a cheque withdrawal of funds from your PayPal account.

While we are working hard to restore the electronic withdrawal service, in the meantime, we are bringing this matter to your attention so that you can plan your future withdrawal activities accordingly.

To request for a cheque withdrawal:
1. Log into your PayPal account, click on ‘Withdraw’.
2. Click on the ‘Request a cheque from PayPal’ link.
3. Enter the withdrawal amount and select your mailing address, then click ‘Continue’.
4. Click ‘Submit’ to confirm your request. In order to help you with this change and until further notice, we will refund the $5 USD cheque withdrawal fee to you for cheque withdrawals made on July 29, 2010 onwards.

For any questions, please log into your PayPal account and click ‘Contact Us’ at the bottom of the page.

We apologise for any inconvenience caused from this change in our withdrawal functionality. We will provide ongoing updates to you here. We thank you for your attention and patience as we work tirelessly to resolve this situation as quickly as possible.

Thank you,
The PayPal Asia Team

2 thoughts on “Paypal withdrawals for Indian companies impacted

  1. Pingback: Paypal withdrawals to Banks in India – Major Issue

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