I had wanted to have a paypal account for a long time. I even created my account some years back – but deleted it later, as I was not in a position to verify my account. The reason is that Paypal would only allow the use of Credit Card for verification. I even wrote to their support whether Debit Card (Visa/Mastercard) issued by any bank of India could be used – and interestingly, the reply was that it could be used for verification. Despite of this, Paypal would give the error that the Debit card was being rejected by Bank. After much searching for the explanation, I surmised that most probably it was due to the fact that Paypal was trying to deduct in USD, whereby the Debit Card linked to Bank Account was authorised only for INR transaction – even if the debit card would speak of its being ‘international’. The Debit card being branded international perhaps means, that it could be used in Nepal and Bhutan!
This time round, due to certain reasons I had to take a relook at Paypal system. I was pleasantly surprised that Paypal now provided for verification through bank account, and also provided for transaction in INR.
I tried with the Debit Card, but again the same error would come. So I finally used the Bank Account route for verification.
In this, one has to put the details of ones bank account. One should be sure that the bank branch has IFSC code. One need not have internet banking facility activated for oneself for using such verification process.
Paypal transfers two small amount of INR into your account through NEFT. If that enters your account it is assumed that you are genuine person.
Once the amount is credited to your account, one has to put those two amount in the verification page of Paypal. If the amount is correct, then one is verified instantly.
Also, one has to disclose ones Income Tax PAN number. That means that the transactions are also recorded for Income Tax purposes. I am not sure if disclosing PAN is optional – as I have PAN, and I entered it in the Paypal account – and did not encounter any problem.
Flip side of Paypal (as on date): For India, Paypal currently does not allow personal payments (due to compliance to RBI directive). So everything is either receipt or expense – it cannot be transfer of money.(as per RBI, Paypal is currently not authorised to carry transfer transactions under Payment and Settlement Systems Act, 2008). So, in this instance, I had to activate my account to receive a refund. But the Paypal system would count it as a revenue receipt – and deducted its fees of 3.9% + USD 0.30.
Images below:
1) The account is unverified:
The Account is unverified
2) Different Verification Options offered by Paypal
Different Verification Options
3) When Bank account is added to Paypal account
After adding the Bank Account
4) When Paypal transfer two small amounts to your account, then there is the following screen that is visible. When the amount gets credited to your bank account, one has to enter the value of two deposit in the boxes. These are small amounts and have to be entered in the format x.xx
After adding the Bank Account
5) If the amount matches, the account is verified instantly.
Paypal account is verified
Update July 2010: Received an email from Paypal with the message:
In accordance with regulatory instructions, we would like to notify you about a change in our withdrawal functionality in India starting on August 1, 2010. At present you can request for either an electronic or cheque withdrawal of funds from your PayPal account if you are an India user.From July 29, 2010 onwards, you will only be able to request for a cheque withdrawal of funds from your PayPal account.
While we are working hard to restore the electronic withdrawal service, in the meantime, we are bringing this matter to your attention so that you can plan your future withdrawal activities accordingly.
Update Jan 2011: Received the following notification from Paypal:
With effect from 1 March 2011, you are required to comply with the requirements set out in the notification of the Reserve Bank of India governing the processing and settlement of export-related receipts facilitated by online payment gateways (“RBI Guidelines”).
In order to comply with the RBI Guidelines, our user agreement in India will be amended for the following services as follows:
1. Any balance in and all future payments into your PayPal account may not be used to buy goods or services and must be transferred to your bank account in India within 7 days from the receipt of confirmation from the buyer in respect of the goods or services; and
2. Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction.
Hi Anup,
Really helpful information you have provided but same problem I am also facing I registered for Paypal and bank account verified in 2 Days but Pan Card is still showing in process it is more the 10 Days. What should be done, please guide.
Are you not able to do any transaction? You can at best wait – or write to the Paypal support
Thanks, for your response. my Pan card status is showing Verification is in process, unable to receive funds. Have already wrritten to the paypal, they are working on the same and will revert.
Thanks once again.
@Sikandar,
I am also facing same issue, Still showing PAN card verification in process.
Please let me know which email id of paypal I need to send the queries.
Thanks in Advance
i am also facing same issue…PAN verification is under process since 1 month…i already wrote 2 mails to them and get the reply that they are working on this.
My account status is verified, but they are not accepting my PAN card. Stating: We could not verify your PAN. Please enter a valid PAN and make sure your PayPal account name matches the name on your PAN card. To change your name, please .
I dont understand what to do in this case?
Please suggest.
You should check that your name in Paypal appears in the same way (same spelling) as in PAN card.
PAN is generated based on different factors like spelling, pronunciation, date of birth, etc – so if you write the spelling differently, then PAN will not match
What about middle name?
Say name on pan is “First – Middle – Last” but Bank account, credit card and paypal account is “First – Last”
Will it block my account access?
How can i get new pan card with “Firts – Last” only
Usually in forms that have only first name and last name fields, the middle name is put in first name field
eg.
First name: Vijay Kumar
Last name: Mishra
i have one problems about how many amount enter the adding fund to account. two small deposit but both are same amount or different. when one bank account not verified then again it is not add so please why not add again same bank account ?
You have to fill the amounts that are transferred to your specified account by Paypal.
Hello
My PAN Card verification is showing in process for four days.
I want to receive my payment.
Please can I know how much time will it take.
My PAN Card verification is showing in process for four days.
I want to receive my payment.
So Please, can I know how much time it will take.
I hope you have entered the correct PAN. I find that Paypal has now put in the system of auto-debit. So once your PAN is verified, then whatever payment you receive will automatically get transferred to your Bank A/c or Debit Card – whichever you have verified.
When I signed up on paypal, and added my credit card to it, a balance of almost Rs 55 (I think 1USD) was deducted(though I hadn’t pressed any ‘verify card’ button). They say it’s free for sign up & purchasing and now charging me for just adding a card. Could you please tell me if this is a “signup fee” or something…..:(
Really dont know. When I tried to add Debit Card (to my already verified a/c), the Debit Card got added. In that situation, when I tried to do a transaction – no transaction could be carried out – but Re. 1 got deducted from the bank account!
In INDIA, if we add ‘International Debit Card’ to the paypal, does it work for paying online ? If not, kindly guide which type of credit card should be preferred so that we can send money successfully. Can the debit cards be used to create virtual credit cards ? Thanks for the valuable information.
Plz read previous comment: http://indiapoint.net/finance/2010/04/23/using-paypal-in-india-and-verification-process/comment-page-2/#comment-4027
So, Debit card does not work – primarily because, of two reasons – 1) Debit Card issued is related to Indian Rupee – so cannot be used for payment in foreign currency, and 2) Debit Cards are considered to have other limitations as to transaction value. So, in India, while you can verify yourself using Debit card, you cannot use it for purchasing in foreign currency. (However not all Debit Cards get added. I have found that Axis Bank debit card can get added for verification purpose. However, its better to verify using bank a/c)
However, credit card can be used for purchase using paypal or even without paypal.
To the other part of your question, as far as I know,only HDFC allows for creation of virtual credit card from Debit Card.