20 thoughts on “So which Indian Minister did Paypal bribe?”

  1. As a freelancer, it’s really becoming a big issue for me. They now automatically transfer my amount into the bank from paypal, and i think deductions are quite heavy, because of paypal’s policy of minimum 7000/- . Now if there is special law for Indians, where there amount is automatically transferred, then paypal should atleast change the minimum amount policy.

    I think either,
    1) it’s a step towords discouraging small businesses that compete  against the business houses.
    2) There is going to be the next bitter move  ( after when many people would protest togather). They would just bring the bitter pill, as a solution of people’s protest.

  2. As a freelancer, it’s really becoming a big issue for me. They now automatically transfer my amount into the bank from paypal, and i think deductions are quite heavy, because of paypal’s policy of minimum 7000/- . Now if there is special law for Indians, where there amount is automatically transferred, then paypal should atleast change the minimum amount policy.

    I think either,
    1) it’s a step towords discouraging small businesses that compete  against the business houses.
    2) There is going to be the next bitter move  ( after when many people would protest togather). They would just bring the bitter pill, as a solution of people’s protest.

  3. Well I am not much into this paypal thing yet. But shouldn’t it be possible to technologically report all your Paypal income to RBI, as soon as you earn it, if what Raj above says is a concern?

    And does that ‘update’ sentence mean that if you earn Rs. 49 per day (less than Rs.7000 heh), it will be mandatorily sent to rupee account with a charge of Rs 50 and you will lose 1 Re anyways. (All other charges extra)

    So you lose Rs X every such day where you ‘earn Rs X less than Rs 50? (and of course pay other charges 😛 )

    Also, Raj I think this fee of Rs 50 every day for each of its Indian member each day is huge extra revenue for Paypal yeah? In fact I suppose most small time developers/website owners will be earning less than Rs 50 a day. So Paypal will earn Rs 50 (minus whatever that person earned), without having to pay anything at all!

    1. I agree. Paypal is no saint. They have used the policy to generate even more profit. I could understand if they charged 50rs on amount less than 1000rs or something. Charging extra for amounts less than 7000rs is too much. Let’s hope we get better options and free market prevails. 🙂

      1. I have no issues with 50 being charged for <7000 or <1000. That exactly is 'free market'. Paypal can demand what it thinks its service is worth. Paypal users can take it or leave it. I have problem with user not being allowed to collect it till that limit is reached because of 'government rule' or 'RBI rule'. That decision is in favour of Paypal and Paypal alone. Even if there is some justification for user being able to use their money only after converting to INR, for clean representation of import-exports like you said, it should not be forced upon the user when that conversion should be made. It adds no value, does it? 

        1. I agree. It should be made such that user can withdraw the amount when it reaches a particular limit. Daily transfer is not justified from Paypal. And i am not even sure if RBI rule specifies that.

      2. Also, lets look at Google Adsense in similar analogy. You get paid through cheque, and not online. So Import-Export clarity will be there for RBI (Sorry I am just simply expressing my understanding of whatever technicalities you mentioned).

        But Google pays only when due payment reaches $100. There the decision about when payment should be made is in hands of a big company. RBI can do nothing about it can it? 

        Similarly, the decision about when payment should be collected should be in hands of user.

        Also, considering a more ‘real physical world’ scenario, do the people who we export things to, pay immediately? Or they pay in lumpsum batches while the goods reach in smaller quantities through ships? Paypal thing is similar. Ad showcasing, or software distribution happens in small amounts, which can collect and lumpsum batch payments can be made.

  4. Well I am not much into this paypal thing yet. But shouldn’t it be possible to technologically report all your Paypal income to RBI, as soon as you earn it, if what Raj above says is a concern?

    And does that ‘update’ sentence mean that if you earn Rs. 49 per day (less than Rs.7000 heh), it will be mandatorily sent to rupee account with a charge of Rs 50 and you will lose 1 Re anyways. (All other charges extra)

    So you lose Rs X every such day where you ‘earn Rs X less than Rs 50? (and of course pay other charges 😛 )

    Also, Raj I think this fee of Rs 50 every day for each of its Indian member each day is huge extra revenue for Paypal yeah? In fact I suppose most small time developers/website owners will be earning less than Rs 50 a day. So Paypal will earn Rs 50 (minus whatever that person earned), without having to pay anything at all!

    1. I agree. Paypal is no saint. They have used the policy to generate even more profit. I could understand if they charged 50rs on amount less than 1000rs or something. Charging extra for amounts less than 7000rs is too much. Let’s hope we get better options and free market prevails. 🙂

      1. I have no issues with 50 being charged for <7000 or <1000. That exactly is 'free market'. Paypal can demand what it thinks its service is worth. Paypal users can take it or leave it. I have problem with user not being allowed to collect it till that limit is reached because of 'government rule' or 'RBI rule'. That decision is in favour of Paypal and Paypal alone. Even if there is some justification for user being able to use their money only after converting to INR, for clean representation of import-exports like you said, it should not be forced upon the user when that conversion should be made. It adds no value, does it? 

        1. I agree. It should be made such that user can withdraw the amount when it reaches a particular limit. Daily transfer is not justified from Paypal. And i am not even sure if RBI rule specifies that.

      2. Also, lets look at Google Adsense in similar analogy. You get paid through cheque, and not online. So Import-Export clarity will be there for RBI (Sorry I am just simply expressing my understanding of whatever technicalities you mentioned).

        But Google pays only when due payment reaches $100. There the decision about when payment should be made is in hands of a big company. RBI can do nothing about it can it? 

        Similarly, the decision about when payment should be collected should be in hands of user.

        Also, considering a more ‘real physical world’ scenario, do the people who we export things to, pay immediately? Or they pay in lumpsum batches while the goods reach in smaller quantities through ships? Paypal thing is similar. Ad showcasing, or software distribution happens in small amounts, which can collect and lumpsum batch payments can be made.

  5. I think there is a reason behind it. As the Paypal accounts remain in dollars, the revenue is not recognized as exports / remittances for the RBI. If the you don’t withdraw the amount and spend it from directly there, there would be no track of foreign transaction (export / remittance and import / expense) in RBI’s account. I think that is the reason for this guideline from RBI.

    Also, if you look at it from Paypal’s view. Yes, they are earning transaction fees on the currency conversion but it is not completely paypal’s profit, there are other third parties involved in the conversion who share this revenue. Also, if this rule was not applicable and you could make purchases from Paypal directly and Paypal would also earn transaction charges on that from the vendor, which they are losing now. So, I don’t see much change in Paypal’s revenue due to this.

    I do not know the facts completely (or I am not a professional who understands this in depth), just putting possibilities here.

    1. Trust me, Paypal doesn’t lose money with this, except for the few without credit cards who linked bank accounts and paid with their balance.

      Why must the guy making the smallest profit suffer the most? Doesn’t a government institution have any responsibility for its poorer people?

      1. Two points.

        1. It is necessary for RBI to have accounts of remittances and expenses in foreign currencies noted. As you said, guy making smallest profit has to suffer. RBI could make the rule based on amount of transactions (as they do in many cases) to avoid causing inconvenience / losses to the small business. But for that, Paypal’s transactions have to come under RBI’s purview so that compliance can be monitored which is not the case as of now because Paypal is not a registered bank in India. But RBI can definitely not give a blanket waiver as that would exclude high value transactions also. It is not just about the taxes but also about the foreign exchange transactions tracking.

        2. I am really not sure about how much Paypal is making extra. Because, in case you cannot spend from your Paypal and you use credit card, there is a good chance that the party on the other side is not paypal and someone else earns that profit.

        I am sure this policy is inconvenient to smaller businesses and could be improved but I am not certain if Paypal bribed someone to get this policy enacted to increase their revenues.

  6. I think there is a reason behind it. As the Paypal accounts remain in dollars, the revenue is not recognized as exports / remittances for the RBI. If the you don’t withdraw the amount and spend it from directly there, there would be no track of foreign transaction (export / remittance and import / expense) in RBI’s account. I think that is the reason for this guideline from RBI.

    Also, if you look at it from Paypal’s view. Yes, they are earning transaction fees on the currency conversion but it is not completely paypal’s profit, there are other third parties involved in the conversion who share this revenue. Also, if this rule was not applicable and you could make purchases from Paypal directly and Paypal would also earn transaction charges on that from the vendor, which they are losing now. So, I don’t see much change in Paypal’s revenue due to this.

    I do not know the facts completely (or I am not a professional who understands this in depth), just putting possibilities here.

    1. Trust me, Paypal doesn’t lose money with this, except for the few without credit cards who linked bank accounts and paid with their balance.

      Why must the guy making the smallest profit suffer the most? Doesn’t a government institution have any responsibility for its poorer people?

      1. Two points.

        1. It is necessary for RBI to have accounts of remittances and expenses in foreign currencies noted. As you said, guy making smallest profit has to suffer. RBI could make the rule based on amount of transactions (as they do in many cases) to avoid causing inconvenience / losses to the small business. But for that, Paypal’s transactions have to come under RBI’s purview so that compliance can be monitored which is not the case as of now because Paypal is not a registered bank in India. But RBI can definitely not give a blanket waiver as that would exclude high value transactions also. It is not just about the taxes but also about the foreign exchange transactions tracking.

        2. I am really not sure about how much Paypal is making extra. Because, in case you cannot spend from your Paypal and you use credit card, there is a good chance that the party on the other side is not paypal and someone else earns that profit.

        I am sure this policy is inconvenient to smaller businesses and could be improved but I am not certain if Paypal bribed someone to get this policy enacted to increase their revenues.

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