Paypal India Discontinues Electronic Transfer – Withdraw Payments Via Cheques Only

Paypal had major plans to grow in Asia. Though successful in most Asian countries, India has always been a problem for Paypal. Though the online payment gateway giants have been in the country for more than 2 decades, RBI have been causing them a lot of grief. And the final nail in the Paypal coffin in India might just be their notification to Indian customers that electronic withdrawals will not be allowed, and that withdrawals will only be allowed through cheques.

For the past few months, Indian Paypal users have been frustrated with the E-wallet company, with Paypal blocking personal payments to and from India. This came about as RBI had issues with Paypal working as an offshore money transferring company. Now this new announcement is definitely going to be a blow to Paypal in India.

paypal terrified

As a saving grace, Paypal have offered to not charge $5 cheque withdrawal charges to any cheque withdrawal requests made after 29th July 2010. Though they assure to be working on the electronic withdrawal service, it still seems some time away before Paypal can finally meet the requirements of RBI.

For those who always went the electronic way, this is how to make a request for a cheque withdrawal:

  1. Log into your PayPal account, click on ‘Withdraw‘.
  2. Click on the ‘Request a cheque from PayPal‘ link.
  3. Enter the withdrawal amount and select your mailing address, then click ‘Continue‘.
  4. Click ‘Submit‘ to confirm your request.

WIth Paypal facing problems on this front, and discomfort of the Indian audience just increasing, isn’t it high time to introduce an Indian e-wallet service? Wallet365 was introduced by Times of India but was immediately asked to stop by the RBI. Some of the Indian payment services that do exist right now are:

The question still remains if users can trust other payment gateways as much as Paypal. As of now, it definitely looks like Indian customers might look for alternatives and not keep sitting around, waiting for Paypal. Will you look for other payment options or will you remain a Paypal faithful?

13 Responses to “Paypal India Discontinues Electronic Transfer – Withdraw Payments Via Cheques Only”

  1. Software Oursourcing Profesional
    July 28, 2010 at 1:01 pm #

    Will be always with paypal ,There is no any alternative for papal
    Paypal = Paypal+++++

    From their day to day activities we can understand paypal always try to keep the service available for Indian users as much as they can.

    My Request to all other Paypal users: Please do not go for alternavite. Paypal = Paypal++ always

    ACX :)

  2. Karl Walker
    July 28, 2010 at 1:14 pm #

    I definitely will go with an Indian company if it is possible to transfer PayPal funds to that company.

  3. July 28, 2010 at 3:23 pm #

    RBI and Indian Business regulatory authorities have time and again tried to deter Indian business and the recent guidelines to PAYPAL to send payments to Indian PAYPAL users by check only is asking small Indian business to shut stop as realization of a foreign check takes 3-4 weeks apart from exhorbitant bank collection charges by banks in India – presently US$ 9.00 per transaction

    I guess RBI shud focs on getting back the monies stashed by our politicians and big business from swiss banks rather than whip the small businesses

  4. Hrishikesh Tonk
    July 28, 2010 at 5:15 pm #

    If PayPal would have to work in India, it would strictly have to adhere to the Indian norms, RBI is doing a good job to save Interest of the Indian Service Providers in this space. When India is the Back Office of the west and gearing up with its IT Infrastructure why should we be dependent on PayPal.


    Nice Update, but i guess ABC Payments and Transecute have shut their shutters and are out of the E- commerce space and EBS is only with a Handfull payment options. With Indian E commerce industry doing nearly 60% transaction on Direct Debit you need a Provider with Maximum Banks on its platform and I guess CCAvenue is a most favourable service provider to Go with…


  5. Steve Jones
    July 28, 2010 at 7:58 pm #

    We’ve moved away from paypal and are considering using I received an email about it last week, from what i can see it takes a few days to go through verification but I think it would be worth it if my time isn’t being wasted by chasing paypal every five minutes.

  6. July 29, 2010 at 2:03 am #

    There are services like Moneybookers that I’ve used in the past.

    But this is seriously too bad. PayPal (or the RBI) expects us to live in the dark ages! I haven’t visited my bank branch since 200$

  7. Mustufa Baldiwala
    July 29, 2010 at 8:48 am #

    PayPal needs to comply to the Indian laws. However, RBI fails to understand that by stopping the electronic transfer of funds, the people who suffer are small Indian businessmen. The entire world trusts PayPal services so it is next to impossible to replace PayPal with another service. RBI shouldn’t block the electronic fund transfer. There are a lot of more important things that RBI should do. On the other hand, PayPal should stop behaving arrogant and should comply to Indian laws.

  8. Dharmesh
    July 29, 2010 at 11:34 am #

    I think RBI is doing very good job and is in favor of indian merchant and service provider. I dont understand one thing, though we have well established companies in india like CCAvenue, why indians are opting for paypal. Also there is no way an indian merchant can directly contact paypal, the only way is to send them a mail and wait for reply.

    I agree with you Hrishi CCAvenue is the most favorable option and it is all the way better than paypal. Atleast they have office in india and we can contact them any time.

    Also ABCPayments and Transecutes have shut down their operations long back and all their merchant have migrated to CCAvenue.

    Anish think you people should do some research before publishing such atricles.

  9. Anish Sadanandan
    July 29, 2010 at 12:09 pm #

    @ Hrishi and Dharmesh: I apologize for overlooking that. Will be more careful in the future :)

  10. July 29, 2010 at 4:01 pm #

    PayPal is the best online service provider for small business owners around the globe, especially in Indians love PayPal much more, Me too, I love their on-time services. They never charge a penny for hidden cost for the past 5 years co-operations

    RBI should consider and strictly free the services of PayPal India

    Arif :)

  11. July 29, 2010 at 6:21 pm #

    Most of us have no choice but to use PayPal. All my clients pay me using PayPal and I can’t ask them to create an account elsewhere, verify their funding sources etc…

    PayPal is a Network monopoly.

  12. July 29, 2010 at 11:50 pm #

    A new fact about Pay Pal : I applied for a charity account with Pay pal because its free and supported by vbulletin software for payment subscription, I have all the documents like NGO Registration certificate, Memorandum of Society, Society PAN card, and the Bank details , bank details were verified by the Pay Pal by depositing amount of Rs. 2 and 40 paisa, after submitting all the document as per said in their website and in their emails, they denied me for the account, just because they have no tie-up with India regarding charity account, what the hell is this, why the pay pal people should not mention at the time sign up process. I have wasted around 1000/- rs in doing fax to pay pal and after 4-5 days they denied.
    Don’t apply for a charity account with pay pal if you are living in India. Just wastage of time and money.

  13. Aman
    July 31, 2010 at 1:37 am #

    Paypal is mostly used by indians as it is the most common payment method for overseas clients in IT industry.

    I for now prefer to deal with moneybookers instead of Paypal…

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