As I am sure a lot of you will know, a lot of the lower end link building market is dominated by Indian webmasters.  Last week Paypal started sending this email to people who had sent money to Indian webmasters  marked as “personal payment” or “gift”.

Your payment of $XX.XX has been returned to you. If you sent the payment with a bank account, the funds will be returned to your PayPal balance. If you paid with a credit card, the amount will be credited back to your card.

We returned the payment to you because we have stopped allowing personal payments to be sent to or from India.

If this was a payment for a purchase of goods or services, and not a personal payment, then you may resend the payment to the seller by following these steps on the PayPal website: (a) click the Send Money tab, (b) select “Goods,” and (c) provide a shipping address.

If this payment was a personal payment, such as a gift to a friend or family member, then we request that you find another payment method until we restore personal payments to and from India.

We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience.

Thank you,

PayPal

The reason for this is simple – if you send someone a “gift” through Paypal, there is no fees for the receiver. If you send a payment for goods or services, Paypal takes a small fee – that’s obviously how they make their money.

Up till now you could of course send payments for goods or services as a “gift”, allowing the the seller to receive their money without paying the rightful fee. Of course this involves a certain amount of trust – you can’t send $100 as a gift then do a chargeback because the seller never sent you something – the money was a gift after all.

It seems hundreds/thousands of Indian webmasters have taken this too far and ruined it for everyone. Paypal have had enough and brought in a blanket ban, no more gift payments to or from an Indian registered Paypal account.

Its not hard to see why. There is no realistic way that any Delhi account holder can say that $1000 that came from 5 different uk seo companies were all gifts and not payments for services

One Indian news website said:

Millions of Indian Freelancers, who rely on online money-transfer service, PayPal, has urged the government and media to step in and take up their issue at the highest level. Freelancers such as Web Developers, Web Designers, Coders, Writers and SEOs are worst-affected.

The freelancers are outraged that PayPal is causing them high inconvenience and loss of money because of this unilateral decision to stop all personal/gift payments to and from India without any notice.

This statement is bordering on ridiculous.  How can they say in the first paragraph that all the people affected are web designers and seo’s, then in the 2nd paragraph say that they are “outraged” that they can’t continue to steal Paypals fees by sending the funds as gifts?  A bit cheeky to complain about “loss of money” when they have been getting away with defrauding Paypal for so long…

Feel free to leave your feedback, positive or negative, in the comments.