So I'm going to go against popular sentiment, and stick my neck out and say that the restrictions put by RBI on PayPal, announced yesterday, and in force from March 31st 2011, are right. Here's what has happened - after almost of a year of to and fro between PayPal and India's Reserve Bank of India, PayPal announced last night that it is amending its user agreements to bring about two significant changes: 1. Can't store money in Paypal Account, and can't buy online. Any balance in and all future payments in an Indian users PayPal account cannot be used to buy goods or services, and needs to be transferred to their bank account within 7 days of receipt. What this means is that Paypal is essentially functioning as a money transfer service, and not an online wallet. 2. Can't receive payments for goods and services exceeding $500 per transaction. What this means: - PayPal is no longer an online wallet operating in India: Online wallets, not linked to bank accounts, are not allowed in India, and for years now, PayPal has been operating as an unauthorized wallet. The way it has operated means that for services to be performed in India, money has been stored with PayPal, and used to make payments overseas. Remember that Wallet365, from the Times of India Group* was shut down a few years ago. Our stand has always been that if PayPal is allowed to operate as an online wallet in India, then so…
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