Exactly an year back I had wrote about how making money online from India is getting tougher. Things are getting even worse with PayPal and RBI further tightening the Forex inflow norms for online freelancers like bloggers. Many of you must have got this update email from PayPal earlier this morning which in short has introduced the following new rules for the Indian users with effect from March 1, 2011:
- The money that you are receiving via PayPal India must be withdrawn to your Indian bank accounts within 7 days
- No direct payment from your PayPal balance is possible, instead you should use the linked credit card
- A single transaction (i.e. receiving money) cannot exceed $500
I can already see a lot of emotional reactions – especially from a lot of youngsters who don’t possess credit cards – following these new norms from PayPal. Henceforth, many of them will be not be able to make payments to their online vendors (e.g. hosting) using the money that’s already received into their PayPal accounts via various blogging services. Many others who were providing PayPal payment options to their Indian customers will not be having that option any longer. Another impact is that the timing of the withdrawal to take maximum benefit of the USD-INR exchange rate, is not possible now as 7 day withdrawal norm is coming into effect. And if you are a big online marketer, henceforth, you are not going to have bigger transactions any more. There may be other side effects as well that I am unable to think of at the moment.
MMO is a risky area
As I have maintained several times in my posts, MMO is not a totally risk-free affair. Sometimes, your fate is in the hands of Google or any biggie out there. Time and again I have been questioned by many people for being so pessimistic about the online risks and sometimes it even resulted in comments like this one. However, I still maintain that it’s a too risky area to be in and not even 1% of the people are really successful there for the kind of time they spend online.
Am I impacted because of PayPal?
Of course! I have been making some decent residual income online and some of the personal impacts are the following:
- I used to give away a lot of rebates to my referrals via PayPal alone and henceforth I might have to discontinue it or keep using my credit cards every now and then
- Some of my individual affiliate PayPal transactions exceeds $500, though this has not been the case every month
- I had the habit of withdrawing PayPal money once every month to help simplify my income tax calculations and now I might end up making 10s of smaller withdrawals every month
Nevertheless, I am a big fan of compliance, rules and regulations and I hope things will get straight soon. But the long term path for Indian online marketers and bloggers is not generating money out of US based marketing and services but more from domestic services. In India, things are happening at a slower pace but the economy is getting so strong that in two or three years most of us online marketers will be making money in Indian rupees without worrying about all these MNC services. That’s when I would call we are all doing some online business with moderate risks than high risks. In the meantime everyone may strictly follow the rules – especially the 7day withdrawal rule – so that your accounts are not banned.
Happy money making!
Reference: PayPal India user agreement notification