Paypal India Asks Indian Users To Add Purpose Code, PAN Number
International online payment company Paypal has introduced new requirements for Indian users in order to comply with Reserve Bank of India's regulations. In an email to the Indian users, the online payment company said all users in India should provide a Purpose Code related to the export-related payments, a Permanent Account Number or (PAN) and a bank account in India if it was not previously added.
This is further to the instructions issued on March 25, when the payment company had asked its users in India to add a valid bank account in India to their Paypal account in order to receive export-related payments and withdraw money.
All these steps are part of RBI's tightening of the online payment mechanism and also to track the money flow.
Earlier this year, the central bank had barred Paypal from operating as an online wallet service (storing money with Paypal). So a customer cannot keep the money on Paypal instead they need it to be transferred to their bank account within seven days of receipt. This would make Paypal a money transfer service in India rather than an an online wallet which users elsewhere outside India use it for.
RBI had also put a limit of a maximum of $500 per transaction.
Now Paypal will compete with players like Zoom or Western Union, which are money transfer companies. However, Paypal is a self-administered online payment gateway and users can easily transfer payments, so it will continue to have its followers.