PayPal India restrict export payments to $500

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PayPal are to stop users in India from spending any balance in their account. From March 1st any payments into Indian user’s PayPal accounts must be withdrawn in full to their Indian bank account. Even worse export related payments received will be capped at a maximum of $500 per payment.

Just in case users have to give a refund there is a little clemency, users have to withdraw the money “within 7 days from the receipt of confirmation from the buyer in respect of the goods or services”. That means it’ll pretty much be impossible for PayPal to police as they’ll never know when a particular payment should be withdrawn.

This all stems from PayPals woes with the Indian regulatory authorities earlier last year. The Reserve Bank of India says that PayPal doesn’t have a license to operate a cross border money transfer service. India’s Payment and Settlement Systems Act of 2007 makes this a requirement.

The biggest impact will be that if you’re buying from India you can’t spend more then $500 in a single transaction. Rather than making multiple smaller payments PayPal advise you to go elsewhere and find a different method of paying.

For Indian PayPal users this is going to severely restrict cross border trade. Whilst many users will be unaffected by the $500 cap due to selling lower value items India is famed for it’s contractors and many of them will be receiving payments in excess of the limit. If you were hoping to get some software written and it’s more then $500 value then it’s time to figure out an alternative way to pay.

2 Responses

  1. I have beeb reading about paypal through the weekend because USA eBay sellers have to report to IRS any money more than 20,000 not bad since we were already paying taxes anyway but I hope they will reduce their fees.Feel sorry for those who reside in India.


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