The grip is slowly loosening: after placing restrictions on PayPal in India, it appears that the Reserve Bank of India has allowed PayPal to increase the receiving limit to $3000 per transaction; In March, it had placed a limit of $500 on transactions. Last month, PayPal forced auto-withdrawal upon Indian customers, ensuring that it functions as a payment gateway rather than a wallet by transferring money to Indian banks within a stipulated time. It still can't operate as a wallet - money received cannot be used to make payments. This increase in limit to $3000 will come as a relief to individual outsourcing businesses using PayPal, since the $500 limit meant that they had to request payments in multiple transactions. (Hat Tip: Preshit Deuskar and Abhishek Baxi). Digital Inspiration reported a few of days ago that PayPal was auto reversing all payments above $500, leaving users with a negative balance (in case the money has been transferred to a users bank account). This means that PayPal is willing to take a hit, if customers do not use their payment services for future transfers. As we had mentioned earlier, the RBI typically takes a wait-and-watch approach. It first placed stringent restrictions on PayPal, and increased the limit. More might follow. We've seen parallels in mobile payments, where they initially launched with low payment limits, and relaxed them based on how the market responded. The guidelines for receipt of payments via PayPal remain the same: - Add a Permanent Account Number (PAN) and Purpose…
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