PayPal services in India restored -- with red tape

RBI mandates new formalities: Sledgehammer to a nut

Two weeks after they were suspended, most of the services in India of PayPal, the global cyber pay window have been restored – but there are some caveats and some significant reductions in services. Bowing to the dictat of the Reserve Bank of India, PayPal is asking its India based users to fill out an online form where they have to create a Purpose Code specifying the purpose of the withdrawal from their Paypal account, before banks will act on them. A new blog by PayPal’s Farhad Irani  suggests that customers abroad of Indian PayPal account holders have three options to pay for services:

1. Using the Pay for Purchases (Goods or Services) tab

2. Completing PayPal checkout at your website

3. Responding to PayPal “Request Money” instructions (invoices).

Details of the Purpose Code formality are provided here  

The catch is: Indian PayPal users (Business, Premier and Personal Account Holders) are no longer able to receive personal payments.

We had reported in this space, when the PayPal hassles of Indian users first surfaced  .

We believe PayPal is making the best of a bad situation – but its loyal Indian users are being short changed for no fault of their own. The RBI has taken a sledgehammer to crack a small and harmless nut and if it wanted to show who’s boss here, it picked a poor example: PayPal is a technology and service born in the Internet Age we live in – and a precursor to a future when the Net will morph into a seamless global ‘mandi’ or market, where Indians like billions of others will buy and sell as equals. It is not about big international trade but about aam janatha or common folk as our politicians keep intoning all the time – and their right to use their hard earned money to buy what they need from the best in the world – as long as it is a small purchase for personal needs.

The Indian government may hassle its citizens for some time, but the Internet is an unstoppable force , overwhelmingly for good,  and its inherent  technology will find a way to get round silly curbs and narrow mindsets, where ever they  pop up.

Bangalore March 6 2010