b2b news - PayPal, an eBay company, is suspending personal payments to and from India and transfers to local banks.Commercial payments to India can still be made by customers, but merchants cannot withdrawing funds in rupees at local Indian banks.
According to PayPal's blog, the services have been suspended while the company works with its "business partners and other stakeholders to address questions they have about the service.
PayPal said it is trying to get the situation resolved as fast as possible, and that it was sorry for the inconvenience that it may cause its customers in India and around the world. A number of bloggers and Web sites have reported that the company has reversed and returned payments to senders.
There may be a link with the move by PayPal and new Indian government rules aimed at preventing money laundering, according to an analyst who spoke on condition of anonymity. The Indian government introduced rules last November that require financial institutions and other intermediaries to verify the identity of clients carrying out international money transfers.
In PayPal's user agreement it says it does not guarantee any user's identity because user verification on the Internet is difficult. PayPal does reserve the right to validate customers' identities, including asking for documents.
Many people in India use PayPal to receive payment for services such as software development and freelance writing.
