Paypal transaction limit increased- hopes and concerns of Indian SMEs
Online payment giant PayPal has been notified by the Reserve Bank of India (RBI) that effective immediately all PayPal merchants in India can receive export-related payments for goods and services into their PayPal account up to USD 3000 per transaction. This has been raised from USD 500 per transaction limit current imposed. This is claimed to be a huge step forward for PayPal as well as for small and medium enterprise (SMEs) who can depends on Paypal for their export business through e-commerce.
After the nationwide dissatisfaction of SMEs and freelancers with Paypal and the Reserve Bank of India (RBI) over dictatorial rules put in place early this year with withdrawal limits of USD 500 per transactions, the RBI seems to have loosened its grip slightly over Paypal.
Mayur Patel, India Country Manager of PayPal commented on the declaration saying “We’re thrilled about the increase in transaction limit and would like to thank the Reserve Bank of India (RBI) for understanding and being supportive of the needs of SMEs who wish to expand their business through cross-border trade”
However, PayPal also reiterated that in order to continue using Paypal service, all Indian users need to add their Permanent Account Number (PAN) and Purpose Code and add their bank account to PayPal. Paypal had, earlier this year, enforced all Indian users to have a PAN or Permanent Account Number, purpose code related to the majority of commercial activities for export-related payments and a bank account in India (if not previously added).
The purpose of adding the bank account was auto withdraw the PayPal balance out of user’s PayPal account and transfer the balance to respective bank account in India. If one does not add a bank account in India to his/her PayPal account then that particular PayPal account becomes limited from receiving export-related payments. However, as reported earlier in the report Paypal stabs freelancers again with auto-withdrawal, the imposition of PAN numbers had troubled to an extent most proprietorship business user accounts.
On the other hand, with the “good news” of the increased limit of USD 3000 now being allowed to Indian merchants, concerns would are now clouding because of the “Auto-withdrawal” enforced by Paypal. Mentionable that Paypal has now been enforcing daily auto-withdrawal of funds for Indian users from September 26, 2011 in order to “comply with RBI guidelines”
Due to the policy of amounts getting auto-withdrawn, the customers are forced to accept the exchange rate of the day. They cannot retain the amount or seek a favorable exchange rate for withdrawal even though the RBI had earlier set a time limit for seven days. Now although the transaction limit is increased to USD 3000 dollars, it would mean more value of funds auto-withdrawn at whatever exchange rate applicable.
Also, as reported earlier, Paypal is often accused of offering lower currency conversion rates (rates lower than the global market of the day). Now that the transaction limit has increased and bigger value of funds would be auto-withdrawn or self-withdrawn, the Indian merchants might end up losing quite some amount in transferring. It’s only a matter of time when it would be proved whether or not the “good news” leads to a win-win situation for Paypal and its users.
Hi,
As the famous saying goes,’ One thing which is common with Paypal is “Change”. You see a change in the policy every day.
Now the receiving limit is increased to $3000. And another thing I have noticed is that the auto-withdrawal feature is on a halt now. I received an amount less than $10. I tried to withdraw it and paypal says you cannot withdraw amount less than $10. SO I waited for the auto-withdrawal but it did not happen. The amount is still in the account.
I think some good things are on the way. If we can purchase goods online, that would be great.
Yes, and undoubtedly PayPal will invent a reason to hold onto these greater amounts of funds for 180 days …
Both John Donahoe and Scott Thompson are simply delusional if they think that PayPal can underpin eBay by becoming even a minor threat to the existing banks/Visa/MasterCard payments systems at traditional Point-of-Sale—the idea is pure science fiction. (Beam me up Scotty!)
The real question is, when are the world’s various “banking” regulators going to finally do something about over-sighting this most amoral, unprofessional, unregulated and clunky financial operator that not only acts like a bank but is in reality a money gouging arm of the Ho’s “eBafia”?
Even though PayPal clearly offers banking-type services (ie, holding users’ funds in non-prudentially regulated and non-FDIC insured banking-type accounts), PayPal is mostly registered in some places not as a bank nor as a provider of credit but only as a “money transmitter” (like Western Union), and indeed PayPal itself has claimed that they “are not a payment network”, and there is a grain of truth in that claim because most (but not all) of their activities facilitate the transmission of funds simply by riding on the back of the banks’ existing payments processing systems.
In fact, the only thing creative about PreyPal has been their founding use of users’ unique email addresses as identifiers for online payment transactions. PreyPal is otherwise no more than a blood-sucking parasite riding on the back of, and in the main cannot function except via, Visa/MasterCard and the banks’ existing payments processing systems.
Regardless, outside of PreyPal’s mandated use on whatever will ultimately be left of the Donahoe-stagnated eBay Marketplace, PreyPal (and any other third-party payments processors) will eventually be consigned to the history books by the retail banks/Visa/Mastercard once those players get their “online” act together. There is nothing surer than the sun will rise in the morning.
Both eBay and its ugly daughter PayPal are most amoral, unprofessional organisations: they both have become the most despised commercial entities on the planet—even more hated than “the banks”. eBay, among other things, has always knowing and criminally, facilitated shill bidding fraud on eBay’s trusting auction buyers. And what else can be said about PreyPal that many PreyPal merchants do not already know? It’s a most “clunky,” unprofessional operation.
Having said that, it’s possible that PreyPal can survive by becoming the merchant account “provider of last resort” for those very small or unscrupulous merchants unable to get a real merchant account from their own bank—Oh, hang on, hasn’t PreyPal always been just that, and charged their users accordingly?