Paypal Reverses Payments Made To Indians 509
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."
Makes me wonder... (Score:5, Insightful)
Why anyone trusts PayPal with their money.
Re:Makes me wonder... (Score:5, Insightful)
Nobody trusts Paypal, but there is no viable alternative. Not yet, anyway, but that can't take long in light of these shenenigans.
Re:Makes me wonder... (Score:5, Funny)
New meaning to the racist term "indian giver"...
Re: (Score:3, Informative)
We gave to the indians and then took it back. We are the indian giver.
Re:Makes me wonder... (Score:5, Interesting)
No viable alternative? What about a normal bank transfer? I used to pay an Indian guy via Paypal but their charges are pretty steep. So I informed with my local European bank for the costs and it turns out this is much cheaper. Problem fixed.
Re: (Score:2)
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.
Also, wire transfers are usually regarded as very insecure here, because when someone thinks "wire transfer," they think "Western Union."
Re: (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:Makes me wonder... (Score:5, Interesting)
The US does not allow for that. The banks don't link into other banking systems seamlessly. They treat the account number as a password (despite it being on the face of every check). The US just doesn't do it. Most of the other countries on the planet have banks that let you transfer money to other banks in that country with a phone call, over the web, in a branch, or maybe even other ways without any problems at all. A large portion of money moves directly between banks electronically (rather than checks, as used in the US).
Hell, I have a fellow customer at the same branch of a US bank that wanted to send me money. It's impossible, according to Wells Fargo, to transfer more than $1000 from one account holder to another. The person may have been misinformed, but the person trying to get me money tried more than once with different people and couldn't do it. The only option is to not transfer it within the bank (meaning, withdrawal the money completely, the deposit it again, which can be done at the same time at the teller, but can't be done by phone, fax, ATM, online, or such, when such options are available outside the US almost everywhere).
With that system, I declare that to be "no viable alternative."
Re: (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 e
Re: (Score:3, Insightful)
starting in 2018, British banks won't be using personal checks any more.
Indeed, UK has many problems :-)
The advantage of a simple piece of paper is that it is not tied to any technology. Maybe Londoners are well connected, but a good part of rural USA doesn't have computers and doesn't really even need them. They use checks to pay for everything. A payment can be concluded in the middle of a field, if necessary. You can't do that with a card or a telephone.
This also connects with the problem of recei
Re:Makes me wonder... (Score:5, Interesting)
Re:Makes me wonder... (Score:5, Informative)
http://en.wikipedia.org/wiki/International_Bank_Account_Number [wikipedia.org]
Re:Makes me wonder... (Score:5, Informative)
http://www.gunpal.net/ [gunpal.net]
It's an alternative.
Re: (Score:3, Informative)
Re: (Score:3, Insightful)
Note that gunpal is the official payment processor of http://www.auctionarms.com/ [auctionarms.com] [auctionarms.com] It's not some little fly-by-night company.
As a person who has never heard of "auctionarms.com" until this very moment, I don't understand how this precludes them from being a "fly-by-night" company. And even if working with this somewhat obscure website (at least I have never heard of it) gives it a patina of legitimacy, that still means nothing. Ebay is a VERY large and popular company, meaning (by your lo
Re: (Score:3, Insightful)
they do, often, attract the lunatic fringe
and a highly armed lunatic fringe at that. Sounds like a dangerous customer base to screw around with.
Re:Makes me wonder... (Score:4, Insightful)
They've been saying that about the shenanigans since the beginning of the 2000s.
The fact is that Paypal acts like a bank but without any of the regulations. A bank can't freeze your assets and the like just because they don't like you or what you do -- only the government can do that. Something's got to give here: the last crisis showed banks can't regulate themselves on a trustworthy level.
There are alternatives: google checkout and a myriad of others. Since ebay doesn't allow competition to their paypal - it makes it harder though...
My solution: "sandbox" bank account for PayPal (Score:3, Interesting)
Re:Makes me wonder... (Score:5, Informative)
Re: (Score:2)
Sure but that is not what this is about. We are not talking about a payment for 8 hours. If you think that you can trust Paypal with thousands of dollars, then that will come back to haunt you. That is what banks are made for b
Re: (Score:2)
Also you normally get hit with a $15 wire transfer fee on top of it.
Where's this? I never paid PayPal to transfer money to a bank account. I'm in the USA, though.
Re:Makes me wonder... (Score:5, Informative)
Re: (Score:3, Informative)
Re: (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: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: (Score:2)
In the US, that's impractical.
The only low-cost ways to transfer money are either PayPal (instant,) or mailing a check or money order via the postal mail system (several days.)
Wire transfers only make sense here when the amount being transferred is $1000+.
Re: (Score:3, Interesting)
What would it take to modernize our banking system? Its 2010; paper checks should hardly ever be necessary anymore.
Re: (Score:3, Insightful)
Burning down all the banks.
Its 2010; paper checks should hardly ever be necessary anymore.
The banks like it that way. In most places (outside the US), bank transfers are free. Not in the US. And the banks like it that way, so it will never change. It isn't about tech, it's about business practices.
Re: (Score:3, Insightful)
Re:Makes me wonder... (Score:5, Informative)
Re:Makes me wonder... (Score:4, Insightful)
Re: (Score:3, Interesting)
Oh, right. Just like electronic voting is more safe than old-school pen-and-paper-ballot.
It all depends on the implementation and those in charge. Neither is automatically more safe than the other.
Re: (Score:3, Insightful)
I don't think you quite understand. It's not practical, not because of technical reasons, but because the banks aren't interested in not charging you money.
Re: (Score:3, Interesting)
Re: (Score:3, Insightful)
Re:Makes me wonder... (Score:5, Informative)
Re: (Score:3, Interesting)
As I have posted elsewhere, my wife and I sued Paypal unsuccessfully over something very similar. But the Ohio attorney general got our problem fixed, and the Washington state attorney general contacted us to follow up later, not because we asked them to or lived in Washington, but just because they ran across our case when generally investigating Paypal. So you might try that if you haven't already. I was impressed by the attorneys general, surprised to see the system working the way it is supposed to.
Y
Re:Makes me wonder... (Score:4, Insightful)
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.
Banking Reform (Score:5, Insightful)
Banking reform in the US should include subjecting PayPal to all the rules and regulations that apply to banks. I find it strange how they've managed to avoid being classed as a bank all these years in the first place. Current regulations leave a lot to be desired, but making PayPal adhere to them would be a good first step.
Re: (Score:2)
Banking reform in the US should include subjecting PayPal to all the rules and regulations that apply to banks. I find it strange how they've managed to avoid being classed as a bank all these years in the first place. Current regulations leave a lot to be desired, but making PayPal adhere to them would be a good first step.
Why should they be a bank? Their primary purpose is enabling transactions not the usual roles of banks. And to be honest, I see no point to treating banks like they are treated in the US. While such regulation delays the mean time between failure for banks, it does so by increasing the size of failures when they occur.
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.
You don't seem to understand what a bank is. (Score:2, Insightful)
Yeah, they only hold, transfer, convert, store, send, give cashback bonuses, interest, etc. They are nothing like a bank at all.
This is not what makes a bank a bank.
What makes a bank a bank and the reason they are more tightly regulated (though that's laughable) is that banks create and destroy money. Banks are a form of privatised money creation.
Paypal on the other hand simply move money from one person to another. They neither create nor destroy money. I would argue that no matter how bad their customer service, their costs or the problems they cause individuals, the paypal organisation is economically far more benign than your lo
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:Banking Reform (Score:5, Interesting)
What Paypal does is actually very similar to what many banks do at least from the user's perspective. Both hold money in accounts, and provide ways to transfer money. Banks provide checks and debit cards for this purpose.
I will admit that Paypal does not offer loans, nor does it over things like savings accounts, but from a user experience they are very similar to a bank where they have only a checking account.
If Paypal does not bother to invest the money sitting dormant in accounts, then many regulations would have only minimal impact on them, since they would be keeping full reserves rather than fractional reserves. The regulations we really want are those that prevent banks from freezing accounts for no valid reason, and from interfering with valid transactions. The procedures already in place for banks on both of these points would really help protect users.
I will admit though that overall Paypal's primary purpose is more like that of American Express than a bank, but the way they do it is debit based rather than credit based, meaning a whole bunch of regulations that would not apply to AmEx could be applicable.
Re:Banking Reform (Score:5, Interesting)
They hold user accounts - you can keep money there.
PayPal credit [paypal.com]
PayPal Money Market funds. [paypal.com]
Sure smells like a bank to me.
Re: (Score:3, Insightful)
People may *use* PayPal like a bank but if they do they are misusing it.
PayPal is not your bank. PayPal is the cash till in your register. No business owner leaves cash accumulating in their register day after day. They count it and clear it out at the end of each day and bank it because the register is a fundamentally insecure and unreliable place. If people treated PayPal more like that there would be less issues (not saying PayPal doesn't have problems - just that people's tendency to accumulate la
Re: (Score:2)
"Why should they be a bank?"
They have been a bank for years based here in Luxembourg, because here the VAT is the lowest.
Paypal is not a bank (Score:2)
Banks create money.
Paypal moves money.
Re: (Score:2)
How do you figure this? In the US the only entitiy that "creates" money is the US Govenment (through the US Mint). Banks are only in the business of moving money between people (and businesses) in the form of loans and deposits. They then "make" their money by taking a percentage off the flow of money, which is simply them diverting money from the stream (moving, not creating).
All this is a simplification of course. But if you take all of the complex things that banks do (like investments or morgages) and s
Re: (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
Re: (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
Re: (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 de
Re:Paypal is not a bank (Score:5, Informative)
Re: (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 othe
Re:Paypal is not a bank (Score:4, Insightful)
No you are completely and utterly wrong. There is a very authoritative document from the Fed that explains how banks expand the money supply, but a simple starting point for you would be the wiki page on Fractional Reserve Banking [wikipedia.org].
Re: (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
Re: (Score:3, Insightful)
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: (Score:2)
Banks, in the US at least, haven’t created money since 1935. That job goes to the Federal Reserve. If you’re referring to creating money through investments, well, PayPal has a money market too.
Re: (Score:2)
Nope. You are wrong. Banks create money every day. That's what makes a bank a bank, and different from all other financial organisations, like say paypal.
Re: (Score:3, Interesting)
Re: (Score:3, Interesting)
Yeah, in Europe they claim to be a bank so they don't have to pay VAT on their service charges.
Re: (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).
Who will be manning the call centers... (Score:4, Funny)
Re: (Score:2, Interesting)
Hehehe....
Nice.
However, PayPal doesn't have any call centers.
They're paypal. The only way you can contact them is by e-mail (which they ignore), or through forms on their site (which you might get a response to in 3-6 months, if you are lucky) -- as for getting your hard-earned money back from your account they randomly chose to freeze, expect it to take 12 - 18 months, again if you are lucky.
If you are unlucky, 36 to 48 months, or (possibly) never. Your luck depends little more than who
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: (Score:2)
The alternative suggested is US only. PayPal works everywhere, which is why people use them.
Due to RBI regulations (Score:5, Informative)
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: (Score:2)
No, this is how our economy tried to work, until someone realised the excessive leverage couldn't go on forever and we had a banking crisis - that you and I had to bail out. The $10,000 you mention isn't actually 'created' money, just temporary credit which has to be paid back eventually, or more likely nowadays, foreclosed on.
Re: (Score:2)
Except now that the crisis is 'over' we're back to fractional-reserve business as usual. Whee!
Re: (Score:2)
since the amount of money only increases over time, each partial payback allowing the loaning of even more times the amount in money, it is indeed money creation. Our western money is loaned into existence.
My theory (Score:5, Funny)
Re: (Score:2)
This is the post I was looking for, LOL
Indians never win against the cowboys - this is old news. Now, someone comes along and tells us how ignorant we are for mistaking Indians for Native Americans. *shrugs*
Re: (Score:3, Funny)
Dear PayPal (Score:5, Funny)
Please do the needful!
Re: (Score:2)
This is funny as hell!
Yet another reason (Score:4, Insightful)
Why PayPal needs to be regulated as a bank, and why I refuse to use it.
Money laundering and terrorism (Score:4, Interesting)
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...
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.
Fail to see the problem (Score:4, Insightful)
Does anyone else see that as a good opportunity to cease their relationship with PayPay (for those stupid enough to have kept using them anytime in the past, oh, decade)?
Remember - Not a bank, by their own maneuverings. You can't actually owe PayPal money, because they don't sell anything or provide any (direct for-cost) services. Sure, you can owe their other customers money, but PayPal itself?
Negative balance? Yeah, time to close that account. Thanks, PayPal, but you can keep "my" negative money. Funny thing, about forced arbitration clauses - You can stack the system as much in your favor as you want, but to get government sponsored armed thugs to go shake down your clients, you need to step in to a real court of law and risk setting some seriously unfavorable precedents.
Re: (Score:3, Funny)
Re:Paypal's unspoken motto (Score:5, Funny)
loosing?
Re:Paypal's unspoken motto (Score:5, Funny)
Re: (Score:2)
it's the opposite of wiining
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: (Score:3, Funny)
Aren't they the same? I mean, for all intensive purposes...
Re: (Score:2, Informative)
Re: (Score:2)
Is Google Checkout available to European users *and* merchants? At least one of the two was unavailable last time I tried to sign up.
Re: (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: (Score:2)
PayPal works with my non-US bank account. Can't use Google to sell UK goods in the UK, receive money in a UK bank account and never send the annoying tax forms to the US.
Re: (Score:2, Insightful)
Ebay has given paypal a monopoly payments for their auctions. this is anti competitive and should be stopped.
Re: (Score:2, Informative)
Ebay owns paypal.. so I don't see this stopping anytime soon.
Re: (Score:2)
Ebay just chose to continue using a different name for their subsidiary payment processor instead of naming it "ebay payments". They are providing an extra service by allowing paypal users to exchange money for other things as well (and admittedly, while I never keep a balance in my paypal account and only make credit card payments through them, paypal is quite
Re: (Score:2)
We just don't like it because paypal sucks and ebay used to be ok with other options. Nobody is forcing us to use ebay. If amazon marketplace sucked as bad as paypal, we would all complain about that too. Bottom line is that ebay can do whatever they want on ebay just like any other online retailer can decide if they want to take a
Re: (Score:2)
What about Google Checkout ?
Is it an option on eBay?
Used to be a PayPal Alternative (Score:2)
supplied by Western Union called BidPay, but I think that's gone gone gone.
Re: (Score:2)
That is six months or longer!! Paypal should be illegal because of crap like this.
Re: (Score:3, Interesting)
People cannot be trialed for the same crime EVENT multiple times. But they can be trialed for unlimited separate events of the same type of crime.
Example: OJ Simpson was trialed and acquitted for the alleged murder of Nicole Brown Simpson. He cannot be re-trialed for the murder of Nicole Brown Simpson, but he can be trialed for any other murders he is suspected of having committed.
If that wasn't the case, Alice could, after being acquitted of murdering Bob, not only kill Charlie and Eve, but go on a nationw