Paypal India Outage – No Payments to or from India [Updated]

Paypal is facing severe outage and all payments to/from India are being reversed.

This is an email I received from one of the payment service

We were just alerted that PayPal India is experiencing some challenges and stopped allowing payments to be sent to or from India. Funds requested through PayPal India are being reversed to their senders, and users have no access to them. PayPal has yet to share with us an estimated time for resolution.

[Update on Feb 11th : Paypal to Suspend Personal Payment for few months – to resolve issue with regulators.]

And here is what Paypal has to say

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.

Seems this is not applicable for commercial payments.

Update: We have sent a mail to Paypal India and haven’t got any convincing answer yet.  The only convincing part has been Alok’s comment on this issue:

I read somewhere that this has happened because RBI asked for some documents but Paypal didn’t furnished them and as such all the transactions from Paypal to Indian Bank has been reversed. That do explain the delay in withdrawing the money from paypal to bank accounts(which people are reporting that they are facing this from 26th Jan onwards) but doesn’t explain why the money is being returned to original senders and that too without any kind of intimation at all.

Statements from Paypal:

Anuj Nayar, Paypal’s Spokesperson

I’m writing to let you know that personal payments to and from India and transfers to local banks in India have been suspended while we work with our business partners and other stakeholders to address questions they have about the service.

During this time, customers can still make commercial payments to India but merchants cannot withdraw funds in Rupees to local Indian banks.

We’re trying to resolve the situation as quickly as possible and we’re really sorry for the inconvenience that this may cause our customers in India and around the world.

Customer Support

Thank you for contacting PayPal. Hi my name is Ruth. I am sorry to hear about this situation, and understand your frustration and concern over the issue regarding your having difficulty on receiving your withdrawn funds that is being reversed.

We are aware of this issue and I sincerely regret the inconvenience it has caused you. Our technical department are working to resolve this matter. We are accomplishing the necessary maintenance to ensure that we will provide you a more convenient service at PayPal. We appreciate your patience and understanding.

I know situations like this can be difficult, so thanks for working with us. If you have more questions, visit our Help Center by clicking “Help” in the top right corner of any PayPal page.

The Real Issue?

[Updated on Feb 12th]

The real issue, as highlighted by Annkur from OnlyGizmos

1. eBay India is not actively involved in this as many Indian eBay sellers who sell internationally have their withdrawals blocked. These were goods, so the transaction is not reversed, but withdrawal to Indian bank account is blocked. To correct this eBay is taking the IFSC / SWIFT code from these Paypal users and doing a Manual Wire transfer. Note these are eBay sellers with a PayPal account, not normal PayPal users. So others are seeing their withdrawal cancelled as it seems from chatter on twitter.

2. This also explains why only personal payments are blocked and not goods. Coz goods are generally for ebay sales which is documented and tracked via eBay.in. But personal payments aren’t tracked. Confirms the issue with RBI is more to do with Tax Evasion.

3. While personal payments would take time to get resolved, the withdrawal to Indian bank account should be active soon. Though that would take some time aswell. No specifics given.

What do you think?

[Updated on March 3rd: Paypal users will need Purpose Code to withdraw to Indian Banks]

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