Ebay Inc.’s PayPal unit no longer will process personal online payments to India, the third-party payments provider said in a blog post this week.
According to the post, PayPal is suspending the payments because of specific concerns raised by “business partners and stakeholders.” Commercial payments to merchants in India will continue as usual, the payments provider also noted.
Mrinalini Manral, an analyst from Mumbai-based research firm Dassler Business Intelligence, tells PaymentsSource PayPal’s decision “seems like a reaction to new Indian government regulations that are aimed to strike down on money laundering.” At the end of 2009, the Reserve Bank of India ordered new reporting and verification requirements on international banking transactions, he says.
“This may have put off PayPal,” Manral says. “However, this may be temporary, as India represents a lucrative market with the thousands of Indians working on projects outsourced from the West.”
PayPal official were not immediately available to comment.