Merchant loosing business over PayPal PAN number verification drive

September 24th, 2011

Seems like RBI has made it so complex for PayPal to do business in India that it has gone crazy. All Indian merchants are facing the brunt of not being able to do business within India with PayPal and since the PAN card verification drive is going on, it has become impossible to do business with PayPal from anywhere. We have heard this from many merchants and have experienced this ourselves that PayPal keeps rejecting valid PAN card details and then put the account on a temporary hold where you are unable to receive any money.

If this was not enough, PayPal is auto withdrawing payment to bank accounts everyday. Which means that even if you get a payment of $2, this amount is sent to your bank next day resulting in loosing money with conversion and small payment transfer charges.

In this age where more and more companies are going online with ecommerce, it seems like RBI is encouraging monopoly by stopping multinational companies like PayPal to do a game changing business in India.


  1. Benny September 26th, 2011

    This is very true. When imposing rules, RBI should check both sides, The loss is not to PayPal but for our own nation. Unless they understand the impact on several thousand exporters, This would always an issue.
    On the other hand, Indian banks are weak in providing merchant accounts.

  2. Gunasekhar September 30th, 2011

    It’s my turn today to be shocked when I received an email saying my PAN number is not valid. It sucks big time. This RBI is taking us down the dark ages with meaningless restrictions.

  3. Chandru September 30th, 2011

    What was the best solution for this pan number problem ? any one please update this..

  4. Prashant September 30th, 2011

    Have you tried 2checkout (2co), i believe they do payment in INR as well.

  5. SL October 1st, 2011

    it was my turn today..
    and am panicking since the time my account has been suspended.
    after months of use,suddenlt my pan information is incorrect for them cuz my pan card name and business name doesnt match.I had a question which they havent given any solution yet.

    Mine is a sole proprietorship firm,mine and my firm pan card is same.In India we donot have pan card for sole proprietorship firm.

    I have my name on my pan card instead of my firms name(thats obvious)

    Paypal has my business name(firm’s name) and my business(firm’s) account linked to it.As we export from our firm,payment should be received in firms account.

    wondering how do i match my pan card name and paypal account name here,if i change paypal account name to personal name,i will face issues in exports,since Export can be done through firm only(payment can be received in firms account only).

    anyone has solution to this..

  6. Vikas October 11th, 2011

    Dear SL,

    Even am facing the same issue. My case could have been worst as I was about to launch an e-commerce store with Paypal as my payment gateway. Imagine customers trying to buy products from the site and they unable to pay, it would have got my entire business to shut down.
    Even am still struggling with a way to find out the solution to match PAN number for proprietor firm. Only way out I can think of is to convert the firm into partnership company with one of my family member and apply for a PAN in new partnership company name and pass through this verification hurdle.

    If someone has a better idea, please let us know.


  7. Prashant October 11th, 2011

    Vikas, have you tried 2CO or Moneybookers?

  8. PonSin October 12th, 2011

    Yes I am facing the same issue.

    Mu story:

    #1. Accidentally I changed my personal PAN number to business PAN number. My account got locked to receive funds.

    #2. After sending so many emails and calls my account restored after a week.

    #3. After one week I got an email with subject ” Your PAN number found to be invalid” and my account got disabled to receive funds. I don’t know why PayPal sending such email for verified PAN accounts.

    #4. So far 10 emails sent and called 20 times. I didn’t get any reply even after 72 hours and in the phone they always say “your account is under manual review”.

    Why not RBI can control the money from bank where PayPal deposit?

    I don’t think getting PAN number in PayPal will control black money.

    I know PayPal is good for all small business companies and freelances, but issues like PAN number is really hurting all.

    This is not good for all and also for our country.

  9. Ajit Sarode October 17th, 2011

    I got this problem starting from Sep 30th

    The given Name & Business name are different. And PAN number is of Business name. When i got the email of PAN No. invalid i changed the PAN no. to that of Name provided but again in a week i received the same type of mail & my account has been limited.

    I’ve mailed them but no reply other than auto replies, which are of no use.

    Hope both RBI & PayPal see this thread, what problems we are facing.

  10. NelKap October 20th, 2011

    Went through the entire ordeal for more than 3-4 weeks.
    For Sole Prop – the individual name is used for verification.

    – Individual bank account needs to be given. PAN # to be with the individual.

    – Bank account is an imp part of verification and PAN name should be same as bank account name

    – emails have zero response.

    DM on twitter @askpaypal
    or call their US contact no.

  11. R Kumar November 16th, 2011

    Our great RBI is run by people who have a RUBBISH BRAIN INSIDE their head. Time and again they come up with a new rule/policy that hurts small businesses and self-employed people like us.

    Just because we do not have a lobby with the government unlike large business houses, no one at RBI cares about the consequences of such policy changes.

  12. Mandeep February 4th, 2012

    I am cancelling my Paypal Account. I am tired of contacting them to renew my Account as my PAN credentials are correct.

    Bye Bye Paypal.

  13. kingshuk February 15th, 2012

    Having same problem from 30th september and account is still limited.Called them several times, at first they said -“give us few days and everything will be work again”…but things remain same.On last call support stuff advised me to add another bank account that is with my personal name as it is on my PAN card,then they will send me two small deposit there and after go through process the account will run again.Bank account with the personal name that is a “Savings account” obviously.I have added my savings account there and personally informed them by phone.They said they already sent 2 small deposits there.But nothing came to my bank account and there is no button to “confirm” whatsoever beside my bank account.they send me a mail that you have added a bank account successfully..that mail also state that they can not confirm savings account.Whats going on???
    Rather than being in that situation RBI should tell us that PAYPAL is not allowed in this country.Its a shame.

  14. virender April 10th, 2012

    I faced such problems when I started my own company. I registered with PayPal on my company name and provided my personal PAN card number because in India we don’t get a PAN number for proprietorship company. Paypal, however, did not understand this and blocked my accounts. I don’t understand why RBI wish to have control over Paypal. They can, and they must, pay attention to other important issues.

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