We are in the middle of an ecommerce boom in India. Indian consumers are getting used to buying products and services online and making online payments.
In such a day and age, the ability to receive payments online is mandatory for any business. The business could be as small as a freelancer providing online services or it could be a medium-large business receiving millions of rupees in revenues every month.
PayPal was invented for this purpose. When PayPal was launched, online businesses blossomed all over the world. New business models were born because it was so easy to receive payments online. PayPal used to work well in India, for a while.
Then all of a sudden RBI (The Reserve Bank of India) started disrupting the business model with a lot of regulations and restrictions.
Post RBI’s intervention Indian PayPal users were not able to:
- Hold their PayPal balance in their PayPal account
- Send or Receive money between Indian PayPal users.
Right now PayPal can be used only to make payments through your credit or debit card to a PayPal user in another country. You can also receive payments to your PayPal account from other countries but that money will be withdrawn to your bank account. You will not be able to hold that balance to make further payments.
If you try to send or receive payments within India, your transaction will not go through. The biggest hurdle for Indian businesses is that there is no peer-to-peer money transfer system within India.