Paypal India Block Leaves IT Guys High & Dry – Need For An Indian Paypal?

Update: Check out paypal’s purpose codes for freelancers and IT professionals here.

Paypal the online payments system has stopped working for India payments to and from. This has caused a lot of issues especially for IT developers who used to freelance for foreign markets and charge purely via the use of Paypal. Reports have been pouring in of several users whose transactions have been reversed.

Following is the standard reply that PayPal is sending to customers:
“Your payment of xxx has been sent back to the sender of the payment. We reversed this payment because we have stopped allowing personal payments to be sent to or from India.

“If this was a payment for a purchase of goods or services, and not a personal payment, then you may contact the buyer and have him or her resend the payment as follows: (a) click the Send Money tab, (b) select “Goods,” and (c) provide a shipping address.

“If this payment was a personal payment such as a gift, then we have requested that the sender find another payment method until we restore personal payments to and from India. We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience.”

Techcrunch reports that Paypal has confirmed that personal payments to and from India have been suspended. There is no word though on why and for what concern was this step taken by Paypal.

The ewallet systems in India are governed by RBI and as you might know a Paypal like system in Wallet365 which was announced in 2006 was shut down due to RBIs directives. Offlate RBI has taken a kinder view towards mwallet and ewallet systems and also announced higher transaction amounts for the same.

As one can see from this particular incident Indians definitely need an Indian alternative for peer to peer payments both from India and from abroad. Too bad RBI is still to give a full green signal to a Paypal like system in India. But who knows after Paypal has stopped its shop the lobby for India payment services providers might just coax RBI to change its mind. Lets wait and Watch I say!

  • Array
  • Array
  • Array
  • Array
  • Array
  • Array


80 Responses to “Paypal India Block Leaves IT Guys High & Dry – Need For An Indian Paypal?”

  1. Reply
    Indian Friend
    February 27, 2010 at 11:25 am #

    Hey friends,

    This was the message sent by paypal to me today. What the hell is export code???? Read the message below.


    We have been diligently working with the RBI and our business
    partners to resume Indian bank withdrawals for the thousands
    of Indian businesses who depend on PayPal to sell their goods
    or services in the global marketplace.

    Today, we are happy to announce that the RBI has allowed us
    to continue local bank withdrawals for settlements for exports
    of goods and services. We are currently making changes to
    comply with Indian regulations for settlements for exports of
    goods and services, and we anticipate that, as of Wednesday,
    March 3rd, customers will be able to use our
    bank withdrawal service.

    As part of the changes, you will be required to fill out a
    new field entitled ‘Export Code’ when you request a withdrawal.
    This information is required under the current laws of India in
    order to identify the nature of cross-border merchant transactions.

    On Monday, March 1st, we will be back in touch with specific
    instructions on how you can move your money into your bank account.

    Moving forward, the RBI has told us that PayPal needs specific
    approvals to allow personal remittances to India, which we
    currently do not have. Until we get these approvals, personal
    payments into India will remain suspended. However, if you are
    an exporter, you will continue to be able to use the PayPal
    service for payments of goods and services. In fact, with the
    changes we are making to our system, PayPal is now set to be a
    more powerful engine for exporters in India. With purpose codes
    for export transactions and FIRCs (Foreign Inward Remittance
    Certificates), you should now be able to get the export
    related benefits you seek.

    You can check the PayPal blog for additional updates.

    We thank you for your business and for your patience during
    the past few weeks.



  2. Reply
    Vanitha Vaidialignam
    February 27, 2010 at 1:53 pm #

    See my blog site for more information on the export code!

  3. Reply
    Make friends
    February 27, 2010 at 5:26 pm #

    yes paypal resumed withdrawl to india

  4. Reply
    February 28, 2010 at 1:51 am #

    I made a withdraw on 21st Feb to my local bank in India from paypal but no update in my bank for this fund.I am really scared no sign of my balance amount in pypal account nor in my Bank .And I dont know whats the new issue of Export License .RBI asking for what ? To stop freelance business ?As far I know amongst all some of little boy and girl working as a freelance Designer working hard day and night from home , now they have to make a SOFTWARE EXPORT LICENSE ? even they hardly know about themselves clearly. you people think so? I am not talking about big size or mid size software farm or Privet Limited company who are also doing FREELANCE JOB.Then whats the issue?
    Happy Holi to every body!!

  5. Reply
    Anirudh K. Mahant
    February 28, 2010 at 10:29 pm #

    Hi all pissed-off fellow indians,

    Just like everyone else I am also one affected by this, so, I’d like to share something. PayPal is hiding the truth! RBI I seriously bet their complaint center doesn’t know a shit about NEFT or the issues, and we live in a great country after all.

    I have posted some serious shit about PayPal and RBI on almost 40-50 Blog sites including their own blog site where they have to shamelessly Delete those comments due to the nature of the comments (PURE BURNING TRUTH). So, here are the Facts they have failed to explain or to manage the situation:

    A) Its your hard earned MONEY they are playing with. Yeah playing with, random reversals without any rational explanations or informing the concerned individuals in time about the ongoing issues.

    B) I found out about these issues just a few days back since it took too long for a simple transaction that takes only around 3-4 days max. In the meantime its my MONEY at stake, but no reply from PayPal just a comforting and lying email that “we have issues”? Well explain what issues?

    C) Thank god I don’t use PayPal all the times, fortunately Moneybookers is working. Yes I was able to transfer from Moneybookers successfully even in these tough times. So RBI has some special rules against PayPal and not against Moneybookers? I’d suggest you guys do the same split up your Money, don’t give them another chance to play games with your hard earned Money. Ask clients to pay you directly into your Bank Accounts if that is possible or use Western Union transfer which doesn’t take as much time as this piehole PayPal and gives you better exchange rates.

    D) These issues started from about 26th January and I bet none of us were informed in the first place from PayPal officially. Oh how can they? They don’t give a crap about your Money. Its only then when you take the pain to contact them, and even with that they reply you with some diplomatic answers. Okay, so the second and the most biggest mistake is that they are not contacting you to choose some other Payment methods while they are having these issues, so does it mean we just want your money in our filthy hands while knowing that we can pay you out in time?

    E) Is this alarming? Yes India and Indians Rising! So, is that a problem with you? Yes its a problem to RBI and the Indian Government more than PayPal. To all the smiling semblances at RBI and at the assembly “WE PAY OUR TAXES” to you don’t we? and where does all our hard earned money comes to? INDIA.

    Its still not over yet, these are just shocks, the aftershocks these events will have will be much more to PayPal and RBI. Don’t give your hard earned money in the hands of these liers, cheaters and stealers anymore! Its evident from these events that they DON’T CARE.

  6. Reply
    Indian Friend
    March 1, 2010 at 10:16 am #

    I dont think that we’ll get the money. IEC code is a very difficult one. Lot of formalities. What if an individual gets money through a website? Fuck. this is unfair.

  7. Reply
    Sanish Joseph
    March 1, 2010 at 2:41 pm #

    Hi everyone. Instead of blaming all the MFs in Government and RBI , lets think about an alternate way to transfer the money to a bank. I seriously don’t want to keep money in Paypal for long. I am getting money transferred to Paypal every month end. Is it OK to pass the money to another friend’s bank account in USA and transfer the money using WesternUnion or something like that to our banks?
    I never tried. What you guys thinking?

  8. Reply
    March 1, 2010 at 7:12 pm #

    guys , it was big scene when i tried to fine the need of IE code ie import export code through tax consultants.

    the website says the payment fee to get this IE code is 250 rupees with some documents and one bank letter which is really hard to get amd time is 2 days .

    the tax consultants here in chennai says the fee range is 3000 to 12000 rupees to get this same IE code in 4 days. so , how are we going to find a solution. these people say we would be quick channel to get you the IE code and if we go directly to zonal DGFT office to get this would take a long time as more formalities are there.
    some consultants say IE code is not available for individuals and it can be availed by company name current account holders only. but few consultants say you pay more money we get you this IE code for individuals too.

    How this game is ? did any one find out this info. This is the situation in chennai , india for this .

    any one else experience , please share. i want to find a solution too..


  9. Reply
    Himanshu Singh
    March 2, 2010 at 9:14 am #

    Hi People,

    I feel that Pay Pal and Indian Govt. has done what is right & legal.

    Infact they have just organised things little bit, its nothing as if our Govt. does not wants us to do Business.

    Purpose Code will help Banks and other agencies to track the transactions easily & effectively.

    We have been blaming Indian Govt. and Pay Pal but I can understand that it happens when we have no idea what is going to happen in future.

    On the other hand I tried lots of services to Invoice my Clients located in Western Countries but truly speaking none of the service has easy mechanism as Pay Pal.

    More over few clients got their money stuck in Moneybookers and now I have a type of blame from them by referring those sites.

    If we have written so much against PP and RBI then it is our duty to praise them this time as they have done something logical and good for us and our nation as well.

    Remember, we need to cooperate our Govt. on security and illegal laundering of money issues.

    Himansshu H Singh

  10. Reply
    Indian Friend
    March 2, 2010 at 9:36 am #

    Hi friends,

    We have no other option than complaining. you’ll lose lot of money if we use western union and other banks in usa. Do you think they’ll provide service for a cheap rate? No. So just pick the number from above. Which ever area you are Call them and say that you want to complain. They’ll ask you why? You explain this IE code problem. Shout at them and dont get scared.

  11. Reply
    March 2, 2010 at 8:05 pm #

    Paypal Shit RBI Shit how can freelancer get export code.
    INDIAN GOVERNMENT SUCKS.. They dont want any one to do freelancing

  12. Reply
    Indian Friend
    March 3, 2010 at 12:24 am #

    Hi swati,

    P0805 is the IE code for Freelancer. We should enter this before clicking withdraw button. Hope this problem gets solved for all. But guyz wait until a week to get your money back into your account. That is including the reversed charges. Once your money is back to normal like before in the paypal account, you can enter the code and send to your bank. For more details visit –
    I’ll again visit to this site and msg you all when i get my money back into my account. I wish all tou do that. If any problems msg here.

  13. Reply
    Indian Friend
    March 3, 2010 at 1:00 am #

    Iam sorry guyz. That was a dummy number given by the Paypal. I think we should apply for IE code. It charges Rs. 250. Keep your pan card handy. Get a sign from your banker stating you have the account from – till date. Shit wat an headache.

  14. Reply
    March 3, 2010 at 3:39 pm #

    Hi Friends,
    Paypal returned my money today after noon (03-Mar-2010). They deducted 40$ from my account. I was withdrawn 738$ on 10th Feb. Today they returned 698$. I think they have converted to current currency rate. Anyway you all will get your money this week.
    When i try to click withdraw menu. It shows following message
    “”We are making some changes to our product in compliance with India regulations for settlements for exports of goods and / or services. During this time, we have temporarily suspended the ability to withdraw money to your bank account. We hope to resume settlements to enable you to withdraw funds to your local bank account without delays.

    As part of the changes, you will also be required to fill out a new field entitled ‘Export Code’ when you request a withdrawal. This information is required in order to identify the nature of cross-border merchant transactions.

    Our sincere apologies for the inconvenience you must be facing. Please be assured that we are working to resolve this as quickly as possible and we will make sure to keep you updated.

    Friends i am working as a freelancer. Where can i get export code. Can i get it from HDFC bank?. Please advise me


  15. Reply
    March 3, 2010 at 6:16 pm #

    Hi friends,

    we can get IE code only for current account. To get IE code please follow these steps.

    1. open current acccount in any indian bank.
    2. on letter head of the bank ask them to give Form B. which is in the IE CODE link. Don’t forget to ask them give in bank letter head.
    3. Then fill rest of the ie code application and attach this bank details and Form B and submit it at DGFT.

    After 7 to 8 days we will get it.

    I will post 2mr regarding these in details. 2mr i am going to DGFT office to submit my document. so that 2mr I can post some more help full details.


  16. Reply
    March 3, 2010 at 10:15 pm #

    I have a website where I plan to accept Paypal payments for downloadable products. Is this possible under the present circumstances?

  17. Reply
    March 3, 2010 at 11:32 pm #

    Hi ramadayakar!

    Its really cool could you give me more details like DGFT?

    Please give mme more details about this

  18. Reply
    March 4, 2010 at 3:14 am #

    ramadayakar.. once you get ie code .. please let us know ..thanks.. but paypal says it now as purpose code… hope you are aware…

  19. Reply
    Jaio India
    March 4, 2010 at 10:24 am #


    I have seen around in internet, many are scolding Indian Government and RBI. You are making a big mistake. We are in a developing country. RBI never takes any decision in a midnight. RBI already warns PayPal about six months ago, and sent messages every month on the same issue. But PayPal doesn’t care about RBI warnings. Finally on January 26th 2010, RBI stopped all transactions by PayPal. RBI doing it’s job. But PayPal don’t want to controlled by any federal/government laws. So it just neglected the RBI warnings.

    Finally, who is the person got affected from all these actions.

    1.) Indians, Indians money stuck in PayPal for about one and half month, means they lost interest for that money. Some persons borrowed money from some other sources. Means they paid some extra interest. So Finally Indians lost some of the money.
    Note: PayPal charged money for the multiple currency transactions. Even PayPal promised the refund, but it was not returned to many Indians.

    2.) RBI, it is making a better India. If PayPal was not controlled in any way by RBI, then what is the meaning of RBI. So ultimately RBI was succeeded in its job. May be in future, RBI try to apply some federal rules PayPal. It means may be in future, we can complain to RBI against PayPal. I know today, even PayPal make overnight decisions against you, or if it ceased your funds, you can’t complain to any one. It was only the decision maker on our funds. We don’t have rights on our funds, how horrible it is. So please never make RBI as the responsible for the PayPal mistakes.
    At least today, RBI placed some codes on PayPal. So I had the hope on RBI to place federal rules on PayPal. I love it.

    3.) PayPal, Which had the big profit on all these actions. It blocked all Indians money for more than a month. Means it must had a big profit. Even PayPal taken action by stopping personal payments, why doesn’t it care about customers. Can PayPal do the same action against US citizens. Never. But PayPal never consider sending a notification to all Indians in any way before it stopped payments. It don’t want to control by any federal/government laws. It charged you 7.4%+$0.60 on every transaction reversed. Instead of returning your fee, it charged double. And when it came to refund, it needs time. I know one of my friend who is waiting for refund from 29th Jan 2010. He tried to call customer care. He sends many mails to customer care. But PayPal had a worst customer in world. Why a financial institution wants it customer care to be worst. Because, then only PayPal can play monkey games on your money.

    PayPal is the big villain behind all the scenes. But it showed RBI as villain, but RBI is just try to make everything good for Indians. PayPal moved all the warnings from RBI into dustbin, but in the end scene, it said RBI imposed new rules. But these rules are not imposed in overnight. But PayPal stopped transactions in overnight, with out informing customers.

    I found many members also saying we don’t have alternatives. Who said it. We do have some other services. Some have better services and lower fees. But the problem with those services are they are not that much popular as much as PayPal. I don’t want to mention any other service name, because, you may thought that I am advertising them.

    Please don’t blame RBI for the PayPal monkey actions.

    PayPal said withdrawals will be back on 3rd Mar 2010, but to my surprise, it removed the entire option of Indian bank withdrawal. Today was 4th Mar, 2010 still withdrawal was not restored.

    Jaio India, Wake up Indian, Wake UP.

  20. Reply
    Jaio India
    March 4, 2010 at 5:32 pm #

    Bank Withdrawal option in PayPal was restored. Check the option in PayPal withdrawal. We need to select the purpose in a drop-down box. Hope this time, our money will credited into our bank accounts.

    Jaio India.

  21. Reply
    March 5, 2010 at 5:57 am #

    yes i too saw that paypal withdrawal seems to work from today.. it is asking for purpose of transaction .. I DID NOT SEE IECODE OR PURPOSE CODE.. ALL THAT IS A MASK I THINK …

  22. Reply
    Sushant@ Technology Design
    March 6, 2010 at 8:27 am #

    But Now they are limiting the Indian users accounts by saying that the previous payment they received was personal.

  23. Reply
    March 6, 2010 at 9:31 am #

    No worry , I also faced the same limited account issue yesterday. Dont waste time to email them. Call them immediately. I made a call to paypal support and they asked questions about purpose of transactions,Relationship with buyer and me,Details about all set of transactions. After that paypal restored my account. Now I am able to withdraw money to my bank account. Yesterday i have withdrawn money to my bank account. Hope i will get it on Wednesday. Because Saturday and Sunday will be holiday. So transaction will start on Monday. I will let you know the result.

  24. Reply
    March 8, 2010 at 9:27 pm #

    Hello friends,
    Good news to all. Funds credited to my bank account today. I was withdrawn funds to my bank account on 5th March friday. Today funds credited to my account. Paypal works great


  25. Reply
    March 9, 2010 at 8:47 am #

    yes, paypal working great.

  26. Reply
    March 26, 2010 at 12:20 am #

    Hi All, after knowing all these paypal issue in past i too was surprised about it. I was using paypal in 2008. Luckily i was not having transation during those period when these issue was there. Now again i got some amount in paypal. I just want to know whether this withdrawal issue is resolved completely? Can I go for widhdraw in already added bank account??
    Please confirm me so that i can be sure about it.

    Thanks to all!

  27. Reply
    March 26, 2010 at 12:23 am #

    One more help, do we need to show any document in banks to settle the withdrawal? I have icici account.

  28. Reply
    April 17, 2010 at 12:41 am #

    Withdrawn on 7th April 2010 but payment status still showing pending. That is going on? Even Farhad you are not coming up about the issue. If there is any problem then you can come up with a write up here is blog so that we can understand what is the problem. Ya Paypal is really a unprofessional. I sent email to support but they to don’t know about the issue. So whom we should write so that we can get right information.

  29. Reply
    October 21, 2010 at 1:31 am #

    You’re all just pissed that Americans finally figured out where all of our money and jobs are going. Good for PayPal.

  30. Reply
    October 21, 2010 at 4:04 pm #

    @Ben – It is matter to be pissed of man, it is something that people in US and Western world can’t do their work correct. So, it is send over to us here….

    Anyways, please try to read the dates of Blog, it is quite old blog and posts, it is closed now and Pay Pal is also active now for India, giving us your money…

Leave a Comment