Important Update from Paypal for PayPal India Users : Change in User Agreement

This is what I posted as comment in TechCrunch blog:

I think many people here supporting the decision of RBI does not understand how the freelancing industry works. Majority of the people who would be affected by our stupid RBI are freelancers. There must be in upwards of 100000 freelances operating out of India.

Let me try to explain it in the best possible terms and I am putting forth my own case. I really don't know how to continue running my own business

We are a small business employing 20 people. Our revenues are about 15K to 20K USD per month. 80% of this revenue comes via Paypal. I have no choice in this, Paypal is the most preferred medium of payment and any attempt of mine is changing that is like hitting against a mountain.

I can split up the payments into multiple chunks of $500. This is somewhat OK (stupid RBI).

Now the main problem comes when I have to pay.

I am a reseller in hosting so that means all my clients pay to me and I in turn pay to my service provider. This alone I have to pay $1000 every month. Previously I never had a problem because I would pay this from my Paypal balance.

Next, I have to pay for the proprietary softwares that I install for my clients for their websites. This is a variable, some months this goes to $ 10K to 15K some times it is under 5k.

Next, we use similar freelancers from around the world to make up for our short comings in expertise. Add another 1K.

So every month I have to spend at least $5K as payment via credit card. This is way way over than the credit card limit even after not considering the peaks in payments.

Credit card payment is the most unreliable. Many of the high cost transactions never makes thru. Then think about the over limit fees, late payment fees, multiple transaction cost, I am going mad.

I am sure there must be a lot more similar people in India with magnitude lesser or greater than what I have put forth.

I think I should have to say BYE BYE to my clients first and then another BYE BYE to my business later.

Simply, STUPID RBI is advising me to mortgage my life to the sucking Indian Banks. I am sure our LOW LIFE INDIAN BANKS MUST HAVE A HAND IN THIS. THEY NEVER LET OTHERS LIVE.

 

Indian Gov is most sleepy creature. If Paypal didn't follow the rules, why RBI allowed paypal in India ?
And now we are habituated using paypal, RBI finds a problem.... ehh??

 

I just now wrote a open letter to RBI via their contact form and published it in my rarely used blog: Please send this message to RBI using their contact form.

emperorofinternet.com/open-letter-to-rbi

Open Letter to RBI

Dear RBI,

Thanks you for taking me to the stone age. Please send me some leaves so that I can tie them around and should Hail RBI!

Do you people have any knowledge about how the internet operates?

Do you people have any knowledge about how internet freelancing works?

Do you people have any knowledge about how internet payment system works?

Do you understand the business concept: Client is the King!

Now when 90% of the internet transactions happen via Paypal and 90% of the people/clients prefer to pay by Paypal, you super brilliant organization is asking me to sacrifice 90% of my client and expect me to operate profitably to bring valuable Foreign Exchange to India.

Won't you ask TCS, WIPRO, INFOSYS and other mega companies to receive payments in chunks of $500? If not, do they pay any commission to you?

Do you people believe all the servers hosting websites are located in India?

Are you in a dream land where internet transactions thru Indian Credit cards is reliable? Don't you know that most of the Indian Credit Card transactions never becomes a successful.

So you are disenfranchising Indians from having websites? This is the pathetic situation of IT minded people in the Land of Free speech. Bravo RBI.

Do you understand that having few websites and paying up for the registration, renewal and hosting fees alone will reach the credit card limit?

Are you sure about the effect of your policies on the Internet Entrepreneurs?

Have you people ever heard about a species called Internet Entrepreneurs?

If you cannot answer these questions properly then it should be you who are roaming around the corridors of RBI with leavers tied around you.

I am going to publish this article all around the internet as much as I can.

Thank you.

 

Indian government wants you to start paying taxes.

 

I have my own tax files and no one raise fingure on me. I have a very transparent IT file.

 

Don't forget paying taxes too.

I guess your prices are too low

 

Freelancing should be recognised as a Profession or atleast a Service Industry.

Recognition of our industry is first and foremost Priority.

 

Please share all your thoughts in the Paypal Blog
www.thepaypalblog.com

Atleast Paypal can come up with an option.

 

I have been reading that these policies are related to curbing black money and taxes etc. Here the quote from Article in Hindustan Times which slams the motive behind these regulations.

 

Here's the RBI notification that started whole mess:

http://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=6107

Code (markup):

 

I don't think any body is shying away from paying taxes. For entrepreneurs like me Tax return are a must for getting a loan with any bank in India.

Regarding the prices: just a couples of month back I hired 10 new recruits but the $hit RBI has poured cold water all over my plans. Now it looks like saving whatever I have would be a big problem.

 

Yes. Your post makes some sense in this issue. This should be the ideal way of looking at it and even I feel that these rules will be modified a bit in coming days. I agree that when you are in business you should be prepared to tackle such issues and should not be worried about taxes, tiny fees and commissions etc.

I also agree that when someone selling a product online for more than $500, should not be using Paypal for that transaction. Why not wire transfer? Why pay Paypal fees unnecessarily?

Also, what's the harm in attaching a credit card to Paypal and make online payments using funds from your credit card?

I think we Indians must come out of thinking everything in gray color... We all want to make huge money but don't want to pay the taxes, we try to find ways to escape... We want to make 1000s of dollars everyday but don't want to declare it in our tax files...

Is it not high time that we all should change and try to be more responsible citizens?

If you want to see the change, you be the first one to be the change that you want to see...

 

Here are the email ids of the people responsible for this notification

rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=6107

Name: G. Jaganmohan Rao
Designation: Chief General Manager
Email ID: gjrao at rbi.org.in

Name: Subhajit Guha
Designation: Assistant General Manager
Email ID: subhajitguha at rbi.org.in

Please email and invite them to live in 21st century.

 

I don't think you get the point. First of all, it has nothing to do with taxes, check my quote above from Hindustan Times article. Secondly on the point of $500 and above you should know that lot of international customers only pay via PayPal, they are not going to use wire transfer because you and I have some problems with PayPal. $500 could be a big amount for you and me, but for people who sell jewelry and other items online, its very small amount.

Some people have already reported that their customers are worried that since we can't refund their money customers are not willing to make advance payments. Some are also worried about the money back guarantee.

 

I got to disagree. Did you know The RBI-Paypal notification is putting some serious issues?

Answer this:
- I want to make 'baby toys' site. Now, I can't. Why???
- I want to own some digital games (legally) from services like Steam, Direct2Drive, etc. Now, I can't. Why???
- I want to buy premium hotfile account. Now, I can't. Why???
- I want to send $25 to some logo designer in the U.S. for designing nice logo. Now, I can't. Why???
- I want to upgrade to Digitalpoint Premium account. Now, I can't. Why???
- I want to pay my monthly shared hosting bill to HostGator. Now, I can't. Why???

 

yes, works perfectly, I use SBI credit card

 

Why??? b'cos we are in India

Dude use credit card, only way I can see now, may be next year RBI will also stop to make payments using credit cards

 

When we have people like you no wonder our government is stuck in medieval mentality. Whatever the backward thing our government does there will be people supporting it.

First of all it is not your business suggesting what people need to sell. Now I employ 20 people, do you know how it started? 8 years back I started without any investment and just accumulated paypal balances to makeup for the inability to get a credit card, I did not have enough full time income to get a credit card.

If this rule was there at that time I for sure would not grown to employ 20 people and make $20k per month.

Do you know how many people are there like me?

The retrograde actions of our government is enough to curb the little freedom of budding Internet Entrepreneurs. I don't understand what solace our government gets in their retrograde moves.

Our government never does anything to encourage entrepreneurship but it does everything to stifle creativity of our entrepreneurs.

Now tell me how I can give my clients 30 DAY MONEY BACK GUARANTEE for the products they purchase from me, most of them want to pay by Paypal. If I can't provide this simple guarantee then why the hell I should be doing business in Internet.

Service providers may somehow bend over these rules but not the product developers. They are doomed to fail. Does our government have people to understand these subtle differences.

Guess not, our government babus never have the vision to understand these minor differences.

They will bend over backwards to accommodate wishes of bigger IT companies like TCS and Wipro to encourage the Indians work like slaves. But they will never encourage Indians to becomes masters.

When many countries do not have a problem in allowing Paypal our super efficient Indian Government finds fault with it.

 

This is what I sent to the RBI persons I have mentioned above:

Dear Sir,

I am contacting you due to this notification.

rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=6107

Can you please go over to this forum thread and see whether the concerns put forward by the people are genuine or not

forums.digitalpoint.com/showthread.php?t=2077016&page=25&posted=1#post15714500

Please help online entrepreneurs like us to flourish. Even if you cannot help us then please do not put unnecessary road blocks.

Thanking you,

 

Mate, my simple answer to your questions is "Add a Credit Card to Your Paypal Account". That's it you will be able make online payments.