EcommerceBytes-NewsFlash, Number 2220 - February 10, 2010     3 of 5

PayPal Blames India Regulators for Service Suspension

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PayPal said it temporarily suspended certain transactions to India so it could respond to inquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India. Over the weekend, PayPal suspended personal payments to and from India as well as transfers to local banks in India. In addition, merchants were unable to withdraw funds in Rupees to local Indian banks.

On Tuesday, the company published a blog post stating it was working with the regulators and PayPal's bank processing partners in India to get the issue resolved as quickly as it could. "We realize that this is causing considerable inconvenience to our customers and I want to reassure you that this is a top priority for the leadership at PayPal."

While customers should be able to withdraw their funds to a local bank within the next few days, personal payments to and from India will remain suspended for at least a few months.

eBay users in India were impacted, according to this discussion board thread

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Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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