Paypal Reversing Transactions of Indian Accounts

In an unprecedented move, Paypal has started to reverse all the transactions sent to & received from Paypal Indian accounts. Ever since such a thing happened, it is one of the most talked topics in many webmaster forums.Within minutes,  many Indians started to complain about reversal in their transactions. Paypal is the most commonly used online payment processor in India,  especially by companies & individuals who are into online services for sending/receiving money.

What Happened ?  Paypal seems to have put a check on the personal payments feature between accounts. According to the official communication from Paypal sent to account holders in India – “We reversed this payment because we have stopped allowing personal payments to be sent to or from India.”

At the same time, they have also specified some steps for making the buyer to re-credit the amount.  It says  –

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.

Looking for Paypal Alternative: Indian paypal holders whose transactions were reversed are fuming in anger across message boards & online forums. Here are some reactions from users of digital point forums,

Unna says, yes i am sure that paypal is freezing the money of the month of Feb 2010. I lost 3 payments .One for 1 Feb and 2 for 2 Feb. I don’t want 3 for 3 Feb. its horrible. I am going to be mad on my gmail with watching reversal mails

Varun21 says, I’m the author of a popular firefox add-on and accept donations. now all payment has been reversed. Is there something we can do under the Indian or the US law? They haven’t given any prior notices etc. These are not fair business practices.

Eviant says, ‘These kind of policies should have informed atleast three months back’

Aviz reacts, ‘what now if its a bug then they have to fix it, or they are going to lose business from India 3rd leading economic state’

Reason for Confusions

* Paypal seems to have not informed or warned about any change in their policies for Indian account holders. Varun21 also adds, ‘Called their Singapore office and they referred to the US line which is closed until their regular business hours. She did tell me that they did notify/publish a notice about policy changes but at that point she stopped giving any details and just referred me to US cust service.’

* The email sent by Paypal  mentions –

‘We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience’.

So Is this a bug or an error on Paypal`s side ?

The big question that lies infront of these account holders from India is , Will they ever get back those reversed transactions from the buyers – since the service was provided to the buyer after payment. Now, with the reversal, it looks like the service was done for Free

Don’t know how many buyers will resend their payments!!

Update as on Feb 5th:  We had contacted a Senior Employee of Paypal & he has accepted to answer questions relating to this matter. Will update here once we receive their official response.

Update as on Feb 6th: 24 hours ON & still no response from the Paypal Employee who agreed to answer the questions. Infact we sent around 10 questions to know the facts.

The magnitude of the problem is getting bigger every passing day & PayPal has not come out with any explanation to its Indian customers !


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