The Reserve Bank Of India (RBI) has increased the transaction value limit for online payment gateway service providers to $10,000 from the existing $3000 with immediate effect, as per a new notification. This means that Indian users can now receive up to $10,000 per transaction through services like Paypal, which could be hugely beneficial for individual outsourcing businesses using PayPal, since they can now request payments in a single transaction rather than multiple transactions. However, these services still can’t operate as a wallet i.e. money received cannot be used to make payments, but we wonder if RBI will also plans to relax this restriction in the forthcoming future. Note that PayPal had received an approval for domestic payments in India in October 2012. As we had mentioned earlier, the RBI has taken a typical wait-and-watch approach. It had first placed stringent restrictions on PayPal, and then increased the transaction value limit to $3000 per transaction in October 2011 and $10,000 per transaction now. We’ve seen parallels in mobile payments, where they initially launched with low payment limits, and relaxed them based on how the market responded. Other guidelines for online payment gateway service providers however remain the same. These include: - Authorised Dealer Category- l banks are being allowed to offer repatriation of export related remittances by entering into arrangements with Online Payment Gateways, after carrying out due diligence - This facility shall only be available for export of goods and services of value not exceeding $10,000. - The banks will open a NOSTRO…
