PayPal Now a Problem For Indian Users!

paypal restrictions in india PayPal is an e-commerce business company of eBay Inc. PayPal allows Online Payment Transfers and processing. Currently, PayPal manages more than 230 million accounts, more than 87 million of them active. It allows customers to send, receive, and hold funds in 24 currencies worldwide. According to  349,143 websites use PayPal. 14,500 websites within the top million most visited sites on the internet. It is a US$2.23 billion worth company! :>

I was busy with exams but was really shocked when I heard of PayPal disappointing policies for our Indian friends and readers. Unfortunately from 1st March 2011, PayPal made changes to the User Agreement for Indian users to comply with Reserve Bank of India regulations. Some Significant changes to the agreement were:

  • Export related payments for goods and services must not exceed $500.
  • Any balance or future payments must not be used to buy goods or services but transferred to a bank account within 7 days from the receipt of payment.
  • Credit/Debit cards must be used for payment processing through Paypal

The above information can be verified at

Many questions are revolving as to why PayPal had to take such strict steps in order to comply with RBI Guidelines but no matter whatever the reason may be Indian fellows really need tonnes of solution to keep their online money transfer going smooth.

I have got a solution that might be helpful to my Indian friends as well as for people from Afghanistan, Iran, Iraq, Pakistan and Egypt where PayPal is banned. My Next post will contain a practical solution to use PayPal in Banned Countries and will also be helpful to Indian users who are currently in a not much favoring state.

Do You know a Solution?

We would highly appreciate to hear of any working and successful solutions from your side. We will publish our solution within 24 hours.

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  1. Waiting for your solution mohd_

    karan chauhan

  2. Welcome back Bro..
    Hope your exams were awesome.

    About the post
    The only solution right now is either use debit/credit cards for online payment or switch to moneybookers or alertpay. The second option doesn't guarantee that your problem is solved forever because as more people switch to other options RBI can impose these rules on moneybookers and alertpay as well in future.

    Another solution for payments is using VCC but not a very good idea I think.

    As for receiving money is concerned here is an eg. what you can do.
    Eg. You are about to receive 1000 USD from someone but the limit is 500 USD. So what you can do is get that 1000 in two transactions of 500 USD each. It doesn't matters how many times in a month you receive 500 USD.

    The rules are not fully implemented yet in all accounts. Some are able to send money as they used to do before and some cannot. Its just a matter of time when the rules are fully implemented.

    Although I don't see that anything is gonna change in these pathetic rules you can still take a step forward a make a petition on the following site informing RBI how these rules affects you.

    Here is the site where you can file your petition:
    Internet Entrepreneurs of India's Petition to RBI

    Thank You

  3. @Karan

    I am going to publish it today buddy.


    Bhavesh! How are you pal? Yes Alhamdulillah they went just fine. :d

    And thanks for those beautiful new ways. I will surely share them on the post with attribution. Though I would need some more explaination on VCC. How widely is moneybookers and alertpay used?

  4. I am fine right now.
    VCC (Virtual Credit Card) is somewhat like a temporary credit card you can say. It is valid just for just 24 hours. Not all banks provide this service. HDFC Net Safe provides a VCC.

    To create a VCC you need to have an actual credit/debit card. After creation you get a different 16 digit no. and CVV no. etc etc. which is not related to your actual credit/debit card. By this you can shop online without worrying because it will expire in 24 hrs. and also you can set a limit of how much to use in that VCC. So VCC is for some one who do not want to pay online regularly or for people who are concerned about the security. For people who pay regularly online then attaching a credit/debit card to paypal is best option so far I think.

    And about alert pay and money bookers, I can say that money bookers is now getting popular after this paypal issue. Many people are switching to them because these rules are only imposed on paypal at the moment. But it will take time for online retailers because not all of them uses Money Bookers at the time because paypal was ruling but I guess they will start adding money bookers as an option for payment as well. Again its just a matter of time :)

  5. use it...
    Beben Koben
    wekekekekkk :P
    i hope that will be help ;)

  6. @Bhavesh

    You deserve an applause for the kind help. I thanked you in the post -> How To Use PayPal In Iran, Egypt and Pakistan?

  7. @Mohammad
    Yup I saw that :)
    Though there was no need of it Bro :)

  8. Hello Mohammad,

    Just wanted to know is it safe to open up a paypal account as an Indian resident and go on adhering to the rules given thereby.

    Thanks for answering.

  9. @Hetal

    With current new policies Indians have to face some big restrictions. In short your account is limited. If you can create an account abroad provided you have a relative there or you have dual nationality then its far better preferred. You will enjoy reading some of the ways you can create PP account in this post -> How To Use PayPal In Iran, Egypt and Pakistan?

  10. Hello,

    But what if we do not have any reliable person abroad?

  11. @hetal

    Then in that case you will have to look for alternative methods as shared by many commentators on this post ->

  12. For donations... u can use the new
    it is interesting.. I've already fitted one at my website

  13. i have more solutions:
    for paypal you can make entropay VCC and can verify your account...visit
    now you may ask why entropay....the reason is "it is not a temporary card it will be activated till you have balance in your card may be for months or years...."
    now make your paypal account with some different country name such as UK where there is no restriction for users.
    now you are eligible to make purchase using your paypal balance..
    if you want to redeem money find some nearest local business account user of paypal...transfer your fund to his account so that you can get back your cash by him..

  14. This comment has been removed by the author.

  15. I have made an entropay account 24th June with funding resource of my AXis bank debit card Mastercard, my VCC got verified after 2 days with PP code, I have sent total 268$ to my friend on 28th June,

    but today 29th of June I can't send money to anyone.
    My paypal account status in now 0$ as I withdraw money to my bank.

    But tomorrow when I have sent money PP my account has 18$

    wats the actual problem

    Raise your voice against paypal and Rbi policy here.Go india Go

  17. I want to know if credit card is necessary to receive payments via paypal

  18. I want to know if credit card is necessary to receive payments via paypal in or bank account is sufficient.

  19. @Rajeshmane
    If you just want to receive money then bank account is sufficient but if you want to pay someone via paypal then credit card is necessary.

  20. I am unable to receive my money via paypal.error says,We're sorry. We're not able to
    complete personal payments to
    account holders in India at this
    what could be the problem & how to resolve it.I am from india.

  21. @Rajeshmane
    Personal payments are not allowed in Inida. If you are receiving money sale of something then from someone outside India then contact that person to send money as "Goods" and provide a shipping address.

    Could you tell for what are you receiving payment. For some ad services or something??

  22. I am receiving payments for ad services & paid to click program.& what is shipping address

  23. and i have created business account & not personal account.

  24. You will need to contact your ad services and ptc owners or their payment department and explain them this issue. I am sure they will help.

    Personal account was more than enough for you. Business account is typically for a person who is running a company or a significantly big business online.

    Good luck.

  25. i made an indian paypal and added a bank to it
    i want to use the paypal for my newly making fiver like site
    but heard that in indian paypal everyday money will be auto withdrawn to bank
    but it should not happen as for fiver like site , always money should be there in paypal
    tell me a solution for this please

  26. i have a solution
    create two PayPal accounts ,one in India (withdraw Money ) and second in some other country say UK using (Deposit Money)

    if u want to withdraw money ,just send money from second a/c (UK PayPal )to first a/c in (IN PayPal) then to bank in India.

    to deposit use the Entropay service and Deposit Money

  27. export related incoming funds has recently changed.

    Might u want to update this info in ur blog.

    Please visit this site