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PayPal Restrictions in India Already in Effect?

The other day, I wrote about the impending restrictions that PayPal will impose on its users in India. These restrictions are actually put in place to comply with the requirements from the Reserve Bank of India (RBI), the country’s central bank.

Earlier tonight, I tried to send payment via PayPal mass pay to an Indian webmaster, but I kept getting the following error message.

There are error(s) that occur on the following lines and fields of your payment file.

* Line 1 : Currency type, Payment amount
* Line 2 : Email address

Click How to upload for more information on formatting payment files.

I tried several times, but it wouldn’t go through. The mass pay CSV file that I was using was perfect, no errors. In the end, I had to use regular PayPal payment to complete the transaction.

paypal sucks PayPal Restrictions in India Already in Effect?PayPal announced on its website that the restrictions will be in effect starting March 1, 2011. It’s not even March yet, but it’s already tough for Indian webmasters and merchants to receive PayPal payments. It’s going to be even tougher when the restrictions are actually in effect.

With PayPal virtually unusable in India, I am wondering how Indian webmasters will be able to stay in business online. There are, of course, PayPal alternatives out there. But can they actually replace PayPal? Will business be the same to Indian webmasters and online merchants without PayPal? Probably not.

Posted by Jay 4 Comments
Filed Under: Making Money Online, Online Payments

PayPal Restrictions for India Users from RBI

An Indian webmaster who buys domain names and other services from me just informed me via chat that starting March 1st, 2011, he won’t be able to use PayPal anymore to pay me. He’s one of probably hundreds of Indian webmasters that I do business with. That means that if they take a hit, so will I, because I will be losing a certain percentage of my buyers.

paypal icon PayPal Restrictions for India Users from RBIApparently, the Reserve Bank of India, India’s central bank, has imposed some restrictions on how PayPal users in India can use the money in their PayPal accounts. These new regulations will be in effect starting March 1st, 2011.

PayPal made an announcement on its website and listed the following restrictions:

  • Any balance in and all future payments into your PayPal account may not be used to buy goods or services and must be transferred to your bank account in India within 7 days from the receipt of confirmation from the buyer in respect of the goods or services; and
  • Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction.

Simply put, whatever money our Indian webmaster friends make online, they must withdraw. They are not allowed to use their PayPal money to purchase products or services online. This kind of defeats the primary purpose of having a PayPal account, doesn’t it?

If you are an Indian merchant and you’re selling export related goods (for example, jewelry, bags, anything that may be considered for export), you can accept payments via PayPal only if the sale price is US$500 or less. I guess that rules out the possibility of buying a Ferrari from India online.

PayPal Alternatives for Indian Webmasters

With PayPal almost impossible to use in India, what PayPal alternatives do Indian webmasters have? Here’s what I can think of that I have already tried:

  • Moneybookers
  • AlertPay
  • Western Union (a bit inconvenient because the recipient needs to actually go to a Western Union branch to claim the money)

Any other suggestions for PayPal alternatives?

Posted by Jay 4 Comments
Filed Under: Making Money Online, Online Payments

Use Mass Pay to Receive PayPal Payments for Free

If you’re making money online, you’re probably using PayPal to receive payments, whether you’re selling directly to your buyers or receiving payments from affiliate networks. Did you know that PayPal charges the transaction fee to the recipient — you.

For every transaction that you process through PayPal, it charges you 1.9% to 2.9% of the transaction amount. That might not be a lot at first glance, but if you look closely and add up all those small service fees that you’ve paid throughout the years, you might realize that PayPal has already made a fortune off of you. It’s not that they does not deserve the service fees that we pay them. It’s that we, as online entrepreneurs, should try to save every cent that we could, especially in these financially trying times.

If you feel the same, then you’ll be happy to know that there is a way to receive money via PayPal for free. It’s called Mass Payment.

What is Mass Payment?
It allows a PayPal Premier or Business account holder to send payments to multiple recipients payments instantly. It’s primarily designed for ‘non-sales’ related payments, such as affiliate commissions, rebates, prizes, and incentives.

What’s so good about it?
If you’re the recipient, you pay no fees. That’s right, it’s free. Compare that with the regular payment method where you — the recipient — has to shoulder the transaction fee.

If the recipient doesn’t pay the transaction fee, who does?
The sender does. The transaction fee is very low for this payment method. It’s 2.0% of the payment amount, with a cap (maximum fee) of $1.00.

I bought a domain name for $335 and used Mass Payment to send my payment. Yes, I had to pay $1.00 for the transaction fee, but it saved my seller around $13.00, which made him quite happy.

What do I need to use Mass Payment?
If you’re the sender, you need a Premier or Business PayPal account. You also need an ounce of patience as sending payment using this method requires some work.

Is there anything else that I need to know?
There’s just one downside to using this payment method — no buyer (sender) protection. Unlike the regular payment method in which the buyer can reverse the payment or do a chargeback (after, for example, receiving a faulty product), Mass Payment offers no protection for the sending party. No worries though if you are sending the payment to a trustworthy recipient.

To learn more about the steps for sending Mass Payment, visit the PayPal Web site.

Note: Mass Pay can only be used by PayPal Premier or Business account holders.

Posted by Jay 2 Comments
Filed Under: Online Payments Tagged With: , , ,