Pay with PayPal” you must have heard these words a lot, especially when you are intending to buy any product from an international website or dealing any business internationally.

PayPal is a payment gateway and mode of transferring money when dealing with foreign customers or vendors.

Almost 98% of the people around the world use it as their mode of transferring money.


Why Choose Paypal

The main purpose of this use of payment gateway is because it’s free of cost. Also, it is prevailing in the market for a long time.

Even as an Indian citizen, one while buying products from another country might have seen that most of the merchants use PayPal as a mode of payment.

 PayPal is the easiest and cheapest way of payment gateway around the world.  But still in India “Pay with PayPal” means you cannot buy this product because this service is almost not available to the general users for some restrictions.

The reason for PayPal not operating in India properly is for some restrictions imposed by the Reserve bank of India (RBI).

The Indian Central Bank has imposed restrictions on PayPal because of which it is difficult to use it by the public. Because of which, advantage of “pay with PayPal” is not available in India.

The reason behind these restrictions stated by the reserve bank of India is to protect the Indians vendors and buyers from money laundering issues. But in fact, these issues still prevail in the Indian market if RBI notices it.


Advantages of Using “Pay With PayPal”.

Following are some solid advantages which prove that “pay with PayPal” is the best mode of payment to use;

  • The foremost advantage of using this payment gateway is, it is the cheapest mode of transfer of payments, with almost less than 5% of charges.
  • The purchasers and cardholders do not have to give other legal information.
  • No tax details, company details, income or other requirements to set up the account as compared to processes required by another account setup.
  • You just provide your email address and a working bank account and that’s it, get going with your purchasing and selling products.
  • Multi-currency and international payments.
  • They set the support team up on the site to help you.


Restrictions by RBI That PayPal Is Subjected To

According to RBI PayPal does not have the Indian banking license to operate in India, as it is the government requirement for any authority to hold the money.

Following are some rules set by RBI for using it in India.

  • They do not allow it to hold money for over 24 hours
  • You cannot accept any personal payments
  • They do not allow to add funds in Paypal account
  • They require Indians to provide PAN no. in their account
  • Do not allow to use its balance for payments
  • Do not allow inter- payment within India with PayPal
  • They do not allow transaction above $500
  • they allow only for paying and receiving money from non-Indians
  • Allow only debit and credit cards to use for PayPal 
  • Cannot use the money for something else

Because of the above restrictions imposed by the reserve bank of India. PayPal has limited its operation for general Indian customers. These were the rules this payment gateway has to follow; otherwise, they could not run businesses in India.


Why PayPal Holders Face a Chargeback?.

 Another problem facing by PayPal user is the chargeback. What is it? Well, when a customer opens a dispute and is not satisfied with the product, then they demand a return or a chargeback. Here, the amount will automatically be deducted from your account. In case you face over one chargeback then the amount deducting from your account will be increasing. Other reasons for chargebacks are, damaged products, products not the same as expected, never received and if a credit card is used for fraudulent activity, then cardholder may also file a chargeback.

To check whether they warranted the chargeback filed, one can review the changes and if it is not warranted then the vendor can file a case against the cardholder company as for why the bareback was not warranted.

The company will interrogate the whole situation and see whether it is valid. If it is valid, it will proceed with the chargeback otherwise it will close the case of the same.

Until they resolve the case PayPal will hold the funds of the account. This process may even take months to solve the issue. If they resolve the issue in the favour of cardholders, then cardholders receive his refund.

Know Your Customer and PayPal.

To save the company from any fraudulent transactions and verification of the customers using PayPal the process of KYC is there to help you out.

However, there are limitations to it. First, there is always error related to the mechanism of the system because PayPal does not verify the customers manually instead they rely on the system itself. Setting up an account requires an email address, credit card number, and bank account number which itself is verification i.e. from the bank. KYC means not only verifying the name of the holder but also it checks the previous transaction history of the client.

It also helps in the verification of multi-currency transaction checking and the rules imposed that the client must adhere to.

Know Your Customer features help the customer and vendor to save them from and mishap, fraud or money laundering issues. The customer support system on the website is always active to answer the queries of the users.

Even though there are many restrictions imposed the RBI on the PayPal services in India still its uses and benefits are many.  It’s completely up to you whether to use this service. But if they remove the restrictions on its services, then it is sure that the business sector in India will rise.


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