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PayPal Blocks India…Another Digital Roadblock that Limits Mobility



According to the PayPal blog, the service is all but useless in India for the time being. According to an unnamed analyst, PayPal has had to severely limit its services in India due to the government’s efforts to eliminate money laundering, especially as it relates to terrorism. The Indian government’s cracked down on services that can be used by terrorists since the 2008 attacks in Mumbai. I certainly appreciate governments’ efforts to thwart terrorism, but digital roadblocks can sure make it difficult to work from overseas.

From PayPal:

I’m writing to let you know that personal payments to and from India and transfers to local banks in India have been suspended while we work with our business partners and other stakeholders to address questions they have about the service.

During this time, customers can still make commercial payments to India but merchants cannot withdraw funds in Rupees to local Indian banks.

We’re trying to resolve the situation as quickly as possible and we’re really sorry for the inconvenience that this may cause our customers in India and around the world.

In my fantasy world, I’d be able to fly to any corner of the world and live/work without much disruption to my digital lifestyle. I’d be able to use my favorite Internet services, subscribe to phone/Internet services at will and web services would work anywhere and I’d be able to complete business transactions without a whole lot of headaches.

Instead, every time I step foot outside of the U.S. I’m faced with roadblocks that make it challenging to work from overseas.

This PayPal snafu reminded me of the difficulties I had using PayPal when I was in India over the holidays. The time I had to spend online was extremely limited as we were in the midst of a crazy Indian wedding. For the first half of my trip PayPal worked like a charm. One day I logged into my PayPal account and was greeted with a message that my account had been frozen due to suspicious activity.

In order to clear up the issue I had to prove that I resided in the U.S. I had the choice of either sending in a credit card statement or allowing PayPal to call me on a land line. I had my mobile phone saved in my PayPal profile, but the system wouldn’t let me use it to authenticate my account with it. Instead, I had to allow PayPal to call my office line. It’s kind of impossible for non-geeks to receive a call on a land-line from halfway around the world, but I was able to hack something together. I logged into my Comcast account and forwarded my VOIP line to my iPhone 3GS. I then turned on my iPhone 3GS for a few minutes until the PayPal call came through with an authentication code that I had to punch in online.

Another challenge I had in India was requisitioning a local SIM card and 3G modem. The terrorists that attacked Mumbai in 2008 used pre-paid phones to coordinate their attacks. The Indian government has since made it illegal for foreigners to pick up a mobile service plan at a store. I had to have my wife’s aunt and uncle order me a Reliance 3G modem and !dea SIM card for my BlackBerry. They had to provide ID and prove residency.

I’ve run into similar digital challenges in several other countries since India’s not the only one trying to protect its populace from terrorists. But I’m not sure these regulations are doing a whole lot considering that I was able to circumvent the above two roadblocks with a whole lot less ingenuity and energy than it’d take to do something evil.

If you’ve spent a good amount of time outside of the U.S. like I have I’m sure you’ve run into digital roadblocks. What have been the most frustrating for you?



  1. Annkur

    02/09/2010 at 1:51 am

    I am sure you were referring to Reliance Datacard up there.

    As for the PayPal issue, almost all webmasters here are troubled. PalPal is quite popular in the webmasters community and used very often by developers. At the same time many exporters also use it for small amounts to come in. I can already see long documentation for PayPal in India soon :(

    Btw: next time you are in India, do drop a word…

  2. Xavier Lanier

    02/09/2010 at 10:54 am

    Thanks for the correction Annkur. I’d imagine all the webmasters, software developers, etc. are extremely troubled by this.

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