PayPal isn’t working properly in India. eBay’s electronic payment juggernaut appears to be blocking personal transactions to or from accounts of India-based users. It is reversing personal transactions; transactions involving businesses are still allowed.

A reader checked in with us yesterday to let us know PayPal notified him that the company had stopped allowing personal payments to be sent to or from India (full e-mail can be found below).

This does not appear to be an isolated incident: see here, here and here for more reports, although we gather commercial payment transactions are unaffected at this point.

This is the standard notification e-mail people are receiving in their inbox:

Hello XXXX, Your payment of xx has been sent back to the sender of the payment. We reversed this payment because we have stopped allowing personal payments to be sent to or from India. If this was a payment for a purchase of goods or services, and not a personal payment, then you may contact the buyer and have him or her resend the payment as follows: (a) click the Send Money tab, (b) select “Goods,” and (c) provide a shipping address. If this payment was a personal payment such as a gift, then we have requested that the sender find another payment method until we restore personal payments to and from India. We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience. Thank you,

PayPal

Asked for more information, Binary Turf received a meatier but equally vague response from the customer service department:

Dear , Thank you for contacting PayPal. I understand that you want to know why the payment you received for $ USD from is reversed. This payment was sent as Personal. We have stopped allowing Personal Payments to be sent to and from India. We are aware of this issue and I sincerely regret the inconvenience it has caused you. We are trying to resolve this as soon as possible. Below are the details: Personal Payment – Send Money for India Accounts · India customers are no longer able to see the option to send a Personal payment on the Send Money page · They can continue to use other payment options, such as eBay checkout. If this was a payment for a purchase of goods or services, and not a personal payment, then you may contact the buyer and have him or her resend the payment as follows: (a) click the Send Money tab, (b) select ‘Goods’, and (c) provide a shipping address. If this payment was a personal payment, such as a gift to a friend or family member, then we request that you find another payment method until we restore personal payments to and from India. Although India customers are unable to send Personal payments, they are still receiving Personal payments from Non India customers. · In order to stop ALL Personal payments TO and FROM India accounts, we have started reversing Personal payments sent by Non India customers starting today. (the only exception will be in cases where the buyer has included a shipping address – we don’t want to delay any shipment of goods) · Emails will be sent to both sender and recipient to let them know why the money was returned and what options they have to proceed forward. (see attached for examples) · We are also in the process of implementing a change on the website to automatically stop the payment from processing, rather than waiting to reverse the payment. We will send you additional updates as soon as we have more details. The Personal payment option on the International Send Money page has been updated and India has been removed from the ‘select a country’ drop down list. · If the payment was for a purchase of goods or services, and not a personal payment, then the buyer may resend the payment to the seller by following these steps on the PayPal website: (a) click the Send Money tab, (b) select ‘Goods’, and (c) provide a shipping address. I’ll be glad to hear from you if you need clarification, please email us again and we will try our best to give you immediate answers. Thank you for choosing PayPal for your online payment needs. We appreciate your business.

The wording seems to suggest that this is a temporary decision, but it’s still unclear why the company decided to take such drastic measures with no prior warning on policy changes whatsoever, and why this appears to be occurring in India only.

We’ve contacted PayPal and will update when and if we hear back.

Update: Anuj Nayar, Director, Global Communications at PayPal tells us:

I can confirm that personal payments to and from India have been suspended while we address some questions from our business partners. You can still make commercial payments. We’re trying to resolve the situation as quickly as possible and we’re sorry for any inconvenience this may cause.

Guess we’ll have to wait until the issue is addressed.

(Hat tips to Jitendra Agrawal and Mahendra Palsule)