Paypal Reverses Payments Made To Indians 509
Posted
by
kdawson
from the money-available-but-not-to-you dept.
from the money-available-but-not-to-you dept.
bhagwad writes "Beginning January 28, Paypal has been reversing the payments made to any Indian provider of services. In addition, Indian users have been unable to withdraw their money to their bank accounts. As a result, a large number of Indian Paypal accounts have negative balances running into the thousands of dollars. The worst part is that users weren't informed beforehand — the funds were just whisked away. Indian providers have gone ballistic, with over 2,000 posts on a thread on the reversal of payments and over 700 posts on this thread about the delay in transfers. Paypal hasn't given any explanation to this behavior other than they're looking into it. Although Paypal claims in the above blog post that payments made for 'Services' are not being reversed, this is not true. All payments not made for 'Goods' with a shipping address have been reversed — in fact, the Paypal e-mail tells the Indian sellers to encourage their clients to lie and claim that they're paying for goods with a shipping address instead."
Re:PalPal Sucks! (Score:2, Informative)
Due to RBI regulations (Score:5, Informative)
Re:PalPal Sucks! (Score:1, Informative)
Why switch from one evil company to another?
Re:Who will be manning the call centers... (Score:5, Informative)
Posted anonymously to keep moderation.
http://www.paypalwarning.com/paypal_phone_number [paypalwarning.com]
Re:Due to RBI regulations (Score:5, Informative)
Apart from these, Paypal would also be subjected to regulations governing these transactions.
The problem is Paypal doesnt want to be regulated as bank but wants to be able to perform what banks do. And this does not go well with the RBI.
Re:Makes me wonder... (Score:5, Informative)
Re:Makes me wonder... (Score:5, Informative)
Paypal Sucks (Score:3, Informative)
http://www.paypalsucks.com/
I got burned by these bozos once. Make sure you read the terms and conditions carefully. They refund only under very tight circumstances. If there was an alternative, i'd use them instead. ... I got bitten for several hundred dollars once...
I had no problems on about 50 transactions
Seriously, PayPal sucks...
Re:PalPal Sucks! (Score:3, Informative)
Seller terms [google.com]
The seller must legally be able to do business in the US, and have a US bank account (since Google is US-based).
The buyer does not have to be in the US.
Re:Banking Reform (Score:5, Informative)
Why should they be a bank? Their primary purpose is enabling transactions not the usual roles of banks.
Yeah, they only hold, transfer, convert, store, send, give cashback bonuses, interest, etc. They are nothing like a bank at all.
Re:Makes me wonder... (Score:5, Informative)
http://www.gunpal.net/ [gunpal.net]
It's an alternative.
Re:PalPal Sucks! (Score:2, Informative)
Ebay owns paypal.. so I don't see this stopping anytime soon.
Re:Paypal is not a bank (Score:2, Informative)
How do you figure this? In the US the only entitiy that "creates" money is the US Govenment (through the US Mint).
It's called Fractional-reserve lending [wikipedia.org]. You deposit $100 into your bank and they led out $900.
If they're paying you 2% interest and charging 4.5% interest in their loans, their profit is (roughly) 4.5% * 9 - 2%. So, they're making 38% or so on your deposit.
This is why banking is so profitable despite the seemingly low rates. It's also what creates the problems of 'runs on banks', but with the FDIC in place, the banks may lend as recklessly as possible, and if they fail (a handful a week are, currently) the losses are socialized among the taxpayers. Private profits, socialized losses. You'd think bankers were running the government.
Re:Paypal's unspoken motto (Score:4, Informative)
Too late for lose/loose. It seems to be viral, perhaps intentionally to drive boomers nuts. Also on the 'endangered' list: affect/effect; their/there/they're; dissent/descent; and the biggie-- your/you're.
The cracks first started years ago when traffic crossings started omitting the apostrophe in "DONT WALK" signs decades ago. I knew things were pointing downhill even then.
Never saw a mixup of sales and sails, tho.
Re:Banking Reform (Score:3, Informative)
That's pretty common. Most US companies doing business in Europe have a subsidiary in a tax haven like Luxembourg (Amazon, for example) or Ireland (Google).
Re:Makes me wonder... (Score:5, Informative)
Re:You don't seem to understand what a bank is. (Score:5, Informative)
I understand that your argument is that the sale of that regulation was a lie, and the banking industry isn't about holding money (but borrowing and lending against it), but I think you are wrong.
Not to mention, you are begging the question. You assume that they don't lend against the money they hold. Even if I agreed with your logic (and I don't) you have assumed a premise that has never been addressed. When you prove Paypal doesn't lend money (and I consider buying stock or bonds to be lending money, for this exercise, as one could default on that debt and have the same result), then we can address the logic I don't agree with.
Re:Makes me wonder... (Score:2, Informative)
I'm sure you've thought of this, but it sounds to me like you should sue Paypal for everything they took from you, plus all the additional damages you've suffered (entire loss of your business), and probably lawyer's fees too. You may even be able to tack some kind of statutory damages on top too.
After all the time and money it takes to bring suit and win you still have to hound the defendant to get paid. The only recourse to not getting paid is to sue.
Re:Makes me wonder... (Score:3, Informative)
A internet bank transfer costs zero in Australia.
Inter- or intra- bank (or both)?
How do your banks get away with such charges?
Regulatory capture.
Re:Paypal is not a bank (Score:4, Informative)
"Actually what caused the great depression is that the market started getting rocky, so everyone pulled their money out at the same time... something which the banks were unable to do"
BECAUSE OF.....
" * You deposit $100 at the bank.
* The bank sets $10 aside as a reserve
* The bank loans $90 to bob, with interest
Now, while you still have your $100 (its in the bank), there is someone else running around with $90"
The banks couldn't give people their money back because they already fucked up loaning it out to other people. This is basic history, not even fucking economics.
Re:Makes me wonder... (Score:2, Informative)
a majority of people use paypal because its easy, there are protections in place (when they feel like protecting you) and its a trusted platform (you dont have to give your credit card details out to every company you deal with)
If you rely on paypal for an income your an idiot, as its been well established that any dispute or problem and your money gets held up for months. If your paying a coder you usually keep the money in a escrow account, paying for goods you usually use your credit card (but paying internationally with paypal is cheaper and easier). If i was a coder i would prefer the money to be in escrow (unless your a dodgy indian coder, which i have had my fair share of and refuse to hire anyone indian).
and you always gotta be wary of people who use western union or transactions in e-gold.
Re:Makes me wonder... (Score:4, Informative)
I think it's important here to make a distinction between an ACH transaction and a wire transfer. My limited understanding of paypal leads me to believe they primarily effect transactions through as an ACH, instead of a wire transfer through the Swift or Fedwire network.
There are strict regulations on wire transfers in the US under the UCC, but little regulating the fees banks can charge. US domestic wires often cost from $10-$25 depending on whether you're receiving or sending the money. Wire transfers in europe are a lot more popular and negotiations through the EU have led to very low or completely absent wire transfer fees.
Wire transfers are still the best way to move money internationally, or to move large amounts of money safely. In the US though, the ACH network is much cheaper.
Re:Paypal is not a bank (Score:5, Informative)
Paypal have always been sleazy (Score:3, Informative)
Paypal have been dodgy for years now, but if they have to go on a robbing spree I guess Indians are as good a target as anyone else.
Anyone that doesn't know about paypal's sleazy practices should treat this as a wake up call, close their account, and cancel any credit cards paypal know about.
Re:Makes me wonder... (Score:5, Informative)
http://en.wikipedia.org/wiki/International_Bank_Account_Number [wikipedia.org]
Re:Makes me wonder... (Score:3, Informative)
Not practical if the payment's coming from the US - my bank charges $40 for an international wire transfer, and that's not out of the ordinary.
You could always use something like xetrade.com and bypass your banks excessive charge.
Re: doesn't always work (Score:2, Informative)
The beauty is that you don't really have to trust PayPal. I usually transfer money out of my PayPal account within minutes of it arriving there, and I have made sure never to authorize PayPal to withdraw from any bank account I have.
Just make sure you have a backup plan so that if / when PayPal suspends your account for some stupid reason you have somewhere else for customers to go.
My sister sold some concert tickets on ebay paid for in full on PayPal. The guy came to her house & picked up the tickets and my sister withdrew the much needed money from PayPal.
About 4 weeks later my sister started receiving many e-mails from PayPal which, as she had no further business with PayPal, she assumed was spam and just ignored them. About 2 weeks ago she received a letter informing her PayPal has listed her with a credit reporting agency (yes, that means no credit cards, phone plans, mortgages for 5+ years) because she failed to pay them back $500 --- the guy had collected the tickets from my sister and saw the concert but then the bastard called PayPal to say he never received the tickets! PayPal simply put my sisters account into negative and started collections proceedings. When my sister finally figured out what had happened she explained the situation to PayPal & they just said too bad she didn't have proof that she gave him the tickets.
So yes, if you withdraw your money it makes it harder for PayPal to take it away from you, but that doesn't mean they can't screw you financially just for using their services
Re:Makes me wonder... (Score:3, Informative)
starting in 2018, British banks won't be using personal checks any more. [ajc.com] if other countries' banks follow suit, checks won't be an option. that's not going to take effect for several years, but that policy is looming nonetheless.
if someone is in another country, it will be kind of hard to just walk over to a branch and meet up with them there.
maybe that's why those Middle Eastern networks (can't recall the name. something like '---hasa'), which feds couldn't stand because terrorist groups liked them, were effective. a phone call and someone spots the cash until it shows up for real.
Re:Makes me wonder... (Score:3, Informative)
Re:Simple Search (Score:3, Informative)
We gave to the indians and then took it back. We are the indian giver.
Re:Makes me wonder... (Score:2, Informative)
PayPal isn't just a way to pay for stuff. It's a cross country and currency method to pay and it has an extensive list of options to integrate it with your front and backend. For example, we use it to: receive money for subscriptions, apply the applicable VAT rate according to user location and hook into the payment system for direct activation of accounts with IPN [paypal.com]. Especially the last thing is a killer - I haven't seen any PayPal "alternative" to do that yet, and while integrating with my bank with a merchant account is probably possible, the monthly fee plus transaction cost is much more than just 2.5% + 0.30ct per transaction.
I'd love to see alternative for PayPal, but so far, nothing matches it in flexibility and reach. Most PayPal killers are a joke, the easiest way to identify that is to check the developers section. Instead of hundreds of pages @ PayPal describing everything in detail plus a sandbox, the Gunpal one is a forum with 4 posts? I rest my case.
Re:Simple Search (Score:1, Informative)
JERRY: You can't give something and then take it back. I mean, what are you...
(catches himself)
WINONA: What?
JERRY: A uh, a person that uh...
WINONA: A person that what?
JERRY: Well, a person that gives something and then they're dissatisfied and
they wish they had, had never uh...
WINONA: And?
JERRY: ...give, given it to the person that they originally gave it to.
WINONA: You mean like, an Indian giver?!
JERRY: I'm sorry, I'm not familiar with that term.
Re:Paypal is not a bank (Score:3, Informative)
Your profit calculation is just plain ridiculous.
The only way they loan out $900 is if you are counting all the iterations: ie. $100 gets deposited, so they loan out $90, that $90 ends up back in the bank as a deposit at some point, so they loan another $81 out, and so on and so on.
But you ignored that they have to pay out that deposit interest on all those deposit iterations not just the initial $100.
And you also can't count it as profit against that $100 deposited, since $1000 ends up being deposited. It makes no difference that the money was created by the banking systems money multiplier and not by plain old printing. The bank still has $1000 of liabilities on the sheet.
Re:Paypal is not a bank (Score:3, Informative)
At every point in time the money is either in cash or in a bank.
It doesn't matter that I spent most of what I earned last year. Since the money just ends up in the bank under a different name (the grocery store, the farmer who supplied the grocery store, the chemical company who supplied the farmer, etc, etc).
Microsoft buying securities is irrelevant, that just means the money was transferred to whomever sold the securities to them. And they either put it in the bank, or held it in cash, or bought some other asset with it - in which case we just follow the chain another link since they bought the asset from someone who now has the money in a bank or in cash.
There simply isn't enough cash for it not to end up mostly back in the hands of a bank. And the banks get their hands on the money that is "in transaction" too most of the time.
The "paper profits" of asset holdings aren't in a bank account, that is true - but that isn't what is being discussed - the money creation of a $100 cash deposit is.
Re:Paypal is not a bank (Score:3, Informative)
I buy a car with the money. The car dealer puts the money in the bank. Sure not all of it he pays some wages - by putting it in the bank account of the worker. He sends a check off to a supplier - who deposits the check in his bank account.
No one is saying that the person who borrows the money puts it in the bank. They are saying that that money makes its way through the system over thousands of transactions and at some steps a little of it is left in the bank (and all of it transitions through the bank in most cases). After enough transactions it is all in the bank (other than the what is horded as cash, as in physical currency).
Re:Makes me wonder... (Score:5, Informative)
Re:Makes me wonder... (Score:1, Informative)
Google Checkout is faster to setup than PayPal and overall has lower transaction fees. You can setup a store quickly for accepting payment for exactly the type of goods and services you're talking about:
http://checkout.google.com/sell/
PayPal only remains in the position because of anti-competitive relationship with eBay.
Re:Paypal is not a bank (Score:3, Informative)
It's called Fractional-reserve lending
No, it's called Fractional reserve banking. You even got it right in your link, but strangely not in the text.
You deposit $100 into your bank and they led out $900.
That's not how it works. The "fractional reserve" applies to the deposit, not the loan. You deposit $100, they keey $10, and lend out $90. When banks "make" money, they do not actually "print" money, so they're pretty much stuck with lending out less than what they take as deposits.
The way that banks "make" money is by enabling people to still use their deposits for payments. Those $100 that you deposited are not lost to you, you can still wire them to a merchant to make a purchase (so then they become the merchant's deposit). So, where there were only $100 in circulation to begin with, there are now $190.
And the way multiply lending money works is that those $90 that the borrower got will eventually come back to the bank as a deposit (because the borrower buys something from it, and the seller deposits that money). Out of those $90, the bank will be able to lend out $81 more. Adding everything up together, you get 100+90+81+72.9+... = $1000
If they're paying you 2% interest and charging 4.5% interest in their loans, their profit is (roughly) 4.5% * 9 - 2%. So, they're making 38% or so on your deposit.
Even though banks make insane margins, it's not quite as bad. Indeed, the $1000 created from the $100 were not made out of a single deposit, but from multiple deposit transaction, on each of which the bank paid interest. In order to calculate profit, concentrate on a single deposit/loan pair: for the $100 you deposit, the banks gives you $2, the $10 that they keep as a reserve is basically dead weight, and from the $90 they lend out, they get $4 ($90 * 4.5%). So, rather than making $38 on the deal, they only make $2.
Think about it. If your calculation was correct, the bank would still making profit if they paid you 40% interest... which is obviously not true.
This is why banking is so profitable despite the seemingly low rates.
What makes a bank so profitable is the huge amounts they move, not the high percentage that they make on each transaction.
Moreover, from a bank owner's perspective, the money made is compared to his own investment (relatively small), rather than to the total amount (huge) that moves through the system. It's this way that he gets extremely high returns.
Re:Makes me wonder... (Score:3, Informative)