PayPal has finally managed to break the ice with Reserve Bank of India on current ‘transaction limit’ chaos for Indian merchants – atleast till an extent. Going further, Indian merchants – who use PayPal to receive money from overseas – can receive upto $3000 per transaction instead of earlier trivial figure of $500. However, there is nothing mentioned over the ‘auto-withdrawal’ feature which is forcing Indian merchants to use PayPal as traditional Payment Gateway rather than an online wallet.
To comply with the RBI guidelines, you must add a Permanent Account Number (PAN), Purpose Code and local bank account to your PayPal account in order to continue receiving export-related payments, says Mayur Patel – India Country Manager, PayPal.
Undoubtedly, the much appreciated move has been welcomed by many companies who primarily depend on overseas clients. After PayPal sketched the guideline of $500 receiving limit few months back, they were facing hard time to collect money from their overseas clients.
The situation became bad to worse when PayPal was guided to reverse all those payments which were over exceeding $500 limit by RBI. Already in grieved, Indian merchants started protecting themselves from PayPal only to head towards other alternatives like CCAvenue, EBs etc.
PayPal was quick enough to calculate upcoming business damage from Indian market and accelerated the efforts of negotiation with RBI. And, the results have started showing off today.
Indeed, it makes much sense for PayPal to safeguard Indian operations and business. Internet penetration in India is on absolute rise for last 2 years. India stands as second largest country in terms of social media users. Network infrastructure is showing significant improvement and internet users are showing great confidence in online banking, transactions and business. Consequently, the adoption rate and need of Online Payment gateway is growing. Being as Online Payment Leader, PayPal has holds valuable trust among merchants and would like to ride upon it for larger gain.
Apparently, this has made PayPal to stand by Indian Merchants and negotiate hard with RBI who was looking firm to its earlier stand of $500. No surprise if I will see few more relaxation in PayPal norms in next few weeks as it’s a Do-or-Die situation for PayPal in India.