India Suspended From PayPal For "At Least a Few Months" 186
More details have come about about what was behind PayPal's decision to suspend personal payments to any user in India, as we discussed on Sunday. In a blog post today, PayPal revealed that payments to India will remain in suspension for at least a few months. Customers in India will be able to pull rupees out of the service into their bank accounts within a few days. The suspension came about when Indian government regulators raised questions about whether PayPal's service was enabling remittances (transfers of money by foreign workers) to Indian citizens. "The problems may have been triggered by a marketing push that promotes PayPal as a way to send money abroad, a source familiar with the matter said. The campaign — which reads 'As low as $1.50 to send $300 to countries like India' — may have caught the attention of Indian regulators, the source said."
Paypal is a mess (Score:5, Insightful)
Re:State vs Internet (Score:5, Insightful)
Stopping money flow and financial services innovation is, like Internet censorship,
Its not about stopping money flow, but rather money flow in a regulated manner. I don't think its even legal for PayPal to have the services they offer without registering itself as a bank. As another someone said earlier, "The problem is PayPal wants to do the functions of a bank but does not want to be registered as a bank".
Re:Why limit incomming remittance? (Score:2, Insightful)
I have no idea persay, but I would be shocked if it wasn't directly caused by their fear that they wouldn't be able to effectively tax such income.
Re:State vs Internet (Score:5, Insightful)
why exactly do we need massive percentages (10-50%) of our resources funneled
to maintain the state and state-run defense and services
So that people who are envious of your physical resources don't all band together, drop by your house one day, and proceed to hack you to bits with machetes? So that there's a semi-controlled environment to enable the provision of services - like power, water and maybe even a little internet?
* physical defense and security being the only notable exception.
And a very big fucking exception they will remain, too.
Dreams, meet reality. Watch out for reality's sucker punch, it can really catch you unawares.
Re:Why limit incomming remittance? (Score:5, Insightful)
1. The want to know about it so they can tax it.
2. They don't want foreign funding of domestic terrorists.
3. They don't want criminals to have yet another way to move money around.
4. They want to protect their export industry by not having that "favorable" effect on exchange rates.
Re:State vs Internet (Score:5, Insightful)
Re:State vs Internet (Score:3, Insightful)
The necessary reasons for countries as they exist today mostly go away when the Internet fully connects individuals.* Obsolescence is a terrible thing for bureaucracy, but can be framed as the primary driver of most "issues" governments have with the Internet.
* physical defense and security being the only notable exception.
Can you give one example of a core role that becomes obsolete? I assume there must be something. The post? That was a core role a couple centuries ago, I guess.
Most state funds go to transportation infrastructure, "physical defense" (ie, military), law enforcement & prisons, education, health care, retirement pensions and other social safety nets (not in that order). Research funding, parks, civil courts, disaster recovery aid & regulatory enforcement and the like are a few of the other less-expensive things that get money.
*None* of those vanish when the internet connects individuals. [I understand that some will pick their least favorite (the military, or the social safety net) and say the government shouldn't be doing it anyway, but that desire's independent of 'connectivity'.] A few clerks may lose their jobs due to on-line requests being filled, but I'm not even sure what people are imagining when they think the internet will somehow obsolete governments--let alone why a state bureaucrat would be living in existential dread.
I assume this particular case boils down to people evading taxation, which is going to be an issue as long as the government spends any money at all. It'll be, unavoidably, the very last state function that becomes obsolete.
WTF?? Indian politicians are nuts, just nuts (Score:2, Insightful)
Yo! India politicians! Another word for remittances is: FOREIGN CAPITAL. They're a GOOD THING. You want your citizens to GET LOTS OF THEM. Getting foreign money into your country is a FREE LUNCH. It's the reason your EXPORT STUFF.
My god. I shake my head.
Re:State vs Internet (Score:2, Insightful)
Re:State vs Internet (Score:2, Insightful)
Exactly. For once, it does not seem to be PayPal that is the baddie here. Although there have been many cases where PayPal has essentially snatched or frozen customers' funds, this doesn't seem to be one of them.
Re:Why limit incomming remittance? (Score:1, Insightful)
What is more shocking is the number of people who seem to think "persay" is a word. The expression is per se, meaning "by, of or in itself".
Re:State vs Internet (Score:3, Insightful)
For as long as there have been people they have been forming groups in order to advance their own interests at the expense of others. That's part of human nature and I don't see it changing any time soon.
Re:State vs Internet (Score:3, Insightful)
- why exactly do we need massive percentages (10-50%) of our resources funneled to maintain the state and state-run defense and services?
Because, believe it or not, there is life outside of the Internet.
Re:State vs Internet (Score:3, Insightful)
There are a lot of ways to remit money - western union, traditional banks, and non traditional means like Hawala which is used a lot in the subcontinent.
So if some one wants to fund terrorists in India, Paypal becomes a very useful conduit -with almost no documentation needs. This is the same reason US has tried to destroy the Hawala network - there are not good records. Traditional banking arrangements atleast provide some idea of the financial flows.
Generally US does the blocking of financial institutions etc. and Americans in general are used to accepting such laws since the 'terrorism' word is leveraged. I think India is just doing the same. If the only documentation you need to receive money is an email address....
And... there are a few higly regulated markets out there. India is one - but another significant one is Canada. Not many banks lost much in Canada. What you call innovation in banking is basically a cool way for banks to enrich themselves.
* Use customer deposits to gamble - and have so many customers, that you know if you fail, the government will have to step in.
* Use the governmental funds to then again gamble and pay yourself.
* Laugh at the fools on the sidelines who think the banks tried their best.
Re:State vs Internet (Score:3, Insightful)
Only an idiot would consider an economy with almost 7% growth [finmin.nic.in] in a global downturn to be a lumbering, stagnant market.
If I'm wondering the streets wearing rags and staving with only 100 cents in lose change that I found by digging though bins and begging and some kind soul gives me 7 cents am I then well off?
Have you seen the poverty in India? There are endless armies of people with nothing who sleep on the streets, beg, and dig though mountains of garbage for anything of value. I have seen it myself.
It's not hard to add 7% to very nearly nothing.
Re:WTF?? Indian politicians are nuts, just nuts (Score:5, Insightful)
Not when the "FOREIGN CAPITAL" exchange service skirts the rules of responsible financial governance... or funds terrorism.
Paypal is not the only option and they should learn to play by the rules the makes sense.
Re:State vs Internet (Score:4, Insightful)
They are baddie here. Banks probably don't have any issues with transferring funds to/from India. PayPal refuses to register as a bank and thus they get this issue. On the other hand, they are registered as a bank in EU and don't have any problems anymore. So perhaps they don't care about India that much?
Don't blame them [India] for wanting to know what is happening with their own currency/finances.
Re:So ... (Score:4, Insightful)
While I am sure it did not damage India's economy the linked article did state that some (a significant enough "some" to be worth mentioning, apparently) of them do use it to get payed for their job.
"Some" of India's 1 billion plus population might be a non-trivial number but the amounts involved are not significant in a $1 trillion plus GDP economy. Sure, some people got burned using a method that's been called into question by the regulator; it's no biggie from India's overall point of view. From Paypal's point of view though, it's significant because of the potential of the Indian market, and that's why I think it's been given such coverage - it is an American publication focused on the technology space, which means Paypal is significant to it. It's a question of perspective.
So this action by PayPal I am sure has inconvenienced many people and for any everyone that uses it as a source of income could find the next months financially challenging.
It isn't an action by Paypal, it's an action by the Indian regulator, and it's not a source of income, it's a method of payment - payment that can be achieved through other means.
So while they might not have a right to operate, I would hope any country would think twice before doing anything that would jeopardize any of its citizens legal sources of income.
The issue is that their their method of payment is under investigation. Whether it's because the payment method allows them to dodge taxes, avoid necessary official declaration or simply that it can aid money laundering, it's something that a regulator is obliged to do. If the word "terrorist" was thrown in there, for example "paypal shuttered because it potentially allows terrorists to transfer funds", would that be sufficient justification?
Note: I was not overly careful with my grammar so maybe you can find another mistake to poke fun of, if you find my logic/opinion to hard to counter.
It wasn't an issue of grammar, it was the wrong word entirely. My issue was with ignorance and the transmutation of "'ve" to "of" due to idiocy, and I called you on it to make an effort to stop it spreading. If you don't want to make an effort to proof your writing, that's your choice, but don't get defensive when you get called on it.
Re:State vs Internet (Score:5, Insightful)
When Paypal says you have $100 in your account, they actually have that money somewhere waiting for you to withdraw.
What in the world makes you think that? Not only do they probably have the money in various forms of liquid and illiquid assets, but there isn't even FDIC insurance to protect you if they screw up.
Re:State vs Internet (Score:3, Insightful)
It seems maybe India can ride out booms too, not get affected so much by other people making money.
India has been independent for roughly the same amount of time as Japan, a country leveled by the US in WWII. For its recent problems, Japan is still a major economic power, despite having a small fraction of the population of India. India's per capita income is $3100, Japan's is ten times that. Sure, India is right behind Japan in total GDP, the population difference is staggering.
Currency arbitrate works well.. (Score:1, Insightful)
And don't forget, India was mostly unaffected by our recent economic downturn
Lets not get ahead of ourselves. The reason India is doing well today is because George W Bush lifted the trade ban with India, allowing US dollars to pour into India. This is made easier by the government of India, which essentially is holding the rupee down to 1/5th of what its real worth actually is, through things like paypal.
Don't believe me? Do this experiment. Get a DBA in India. He or she makes about 25,000rs a month. That's $500 a month. But put that same person in the USA, and would make at least 2,500 USD a month. Therefor, there is a minimum error of 2000USD in the conversion of 25,000rs to 500USD.
The whole international exchange system is a joke. We see this in Japan, China, India... really, the whole idea that the free market can accurately price foreign currencies relative to each other is a colossal and complete joke. When the government can print or dig for money, it can make its exchange rate be anything and so the markets aren't really pricing the relative values of currency, as much as they are pricing what they think the governments will manipulate it as.
But currency prices are not accurate. Prices are not accurate, therefor, there is no free market. The greatest irony of so-called modern capitalism, is that the greatest sources of wealth accumulation change depend entirely on the fact that there is no market at all.
Exactly (Score:3, Insightful)
"I'll use PayPal once it is regulated, meself."
So you tie your paypal account to a credit card, and every time you log in they say "Give us all your bank account information, that will be really convenient!".
And you wonder, who are they trying to kid? Paypal answers to no one, and it appears they want access to your bank account not because it's convenient, but because when they deal with a credit card company, *there are federal laws that give you protections that PayPal would rather you not have*.
Like: Right to dispute a charge, and PayPal has to answer within a short time or they lose
Processes that must be followed, or else PayPal loses
And I'm supposed to give that up because... it's convenient? I'll bet a lot of people have linked their bank account to these guys, too. I think that's a foolish mistake. Once they have money from your bank, you're basically screwed. You're at the whim of a low-level clerk at PayPal. Thanks, but no thanks.