In a recent email and blog post, PayPal said that they will be restraining Indian users from using the money in their PayPal account to purchase anything along with putting a stipulation that they have to withdraw the money within 7 days. In addition to that, they have also said that Indian users cannot accept payments more than $500.

Many users have been blaming the Reserve Bank of India (RBI) for this, but most of them haven’t done any fact-checking as such and are just blaming it because they feel that PayPal has no faults whatsoever. So I sat down with one of my roommates who has been an ex-RBI employee who has worked with them for 7 years to understand why this is happening.

Let me take you through this. First of we take a look at why PayPal cannot keep your money with them for more than 7 days and then delve into the $500 restriction they will be putting into place. Here is the actual conversation edited in some form by me without changing the details.

Me: So PayPal says that they cannot keep the money in their account for more than 7 days? Why is this happening.

RBI-expert: Because if PayPal keeps the money with them, they have to be regulated as a bank (and any institution that does it have to do the same) and PayPal does not want that to happen. Any entity which provides on-demand payments have to be regulated as a bank as per RBI rules, this is mandated because if they hold money for more than 7 days they have to provide users with interest. With this new change PayPal is basically circumnavigating this regulation so that they don’t have to answer questions to any government about how they conduct business and why they charge an exorbitant amount to customers to accept payments whilst continuing to not giving users interest like every other bank in India does.

Me: So you are saying that PayPal is practically f*cking all Indians.

RBI-expert: No I wouldn’t say that, but I would say that their business heads know how to circumnavigate against a country’s policies and that they are adamant about accepting regulations because that would mean that they have to cut down on their charges and also ensure that they do follow all guidelines laid down for a bank.

Me: Ok, so I see that they are screwing their customers with a hefty fee and now this. I do understand that they want to make money, but what is about $500 transaction limit.

RBI-expert: Well, once again this is a government and RBI mandated thing. All entities who bring cash-flow into India have to basically report transactions above $500 to the RBI and government. PayPal is basically just circumnavigating around this mandate by restricting the payments to $500. Once they do this, they have no obligation to report it to the RBI or the Indian government.

Me: So you are basically saying that these new changes by PayPal is just about screwing the RBI, Indian Government and people who use their service.

RBI-expert: Well, these are the rules. I will simply say this. If PayPal accepts the RBI regulations they have to be treated a bank and I can see that they are hell bent on not doing it. They are basically finding ways to get over it because once they become a bank they come under a different set of rules. Right now PayPal is a monetary service but they are not like say SBI, ICICI, HSBC or Citibank and do not have to adhere to the rules. Once you become a bank, you have stringent rules which I don’t think PayPal wants to follow.

So as you can see, from the above conversation which came through from a horse’s mouth, I feel that PayPal is basically cheating the RBI, Indian government and Indian users because they don’t want to be regulated. All I can say is that we need to boycott these services, check out some PayPal alternatives.

Though these things may make my statement that RBI is in no fault at this sound untrue, but you have to understand that these rules have been in place in 2004 and some of them since 1999. So saying that RBI is screwing PayPal is basically wrong. PayPal has been floundering these rules since they came into India and the RBI is just reining them in. They might have given them an option to change to being a bank or stop flouting the rules laid down by the Government of India. I believe you will understand what PayPal chose to do.

PayPal has also been blocked or regulated in countries such as Japan, Brazil, USA among others. Some of these countries have put in similar restrictions on in place which were also done last year in India. So it does not really make sense to say that RBI is the only one who is regulating PayPal.

This post has been updated with additional inputs and facts.

The post Why Is PayPal Screwing Indians? An ex-RBI Employee Tells Me The Facts appeared first on Techie Buzz.

Have you ever wondered how the world’s first laptop looked? or how much did it weigh? If you did, the answer is in this post. Read on.

The first portable computer was invented in the year 1981. It could be called as a portable computer rather than a laptop, for the reason which I will state in this post later. This portable computer was released by the Osborne Computer Corporation, under the name “Osborne – 1”. The Osborne – 1 was priced at around USD 1795 which was just about half the cost more than the normal computers in those times (1981).

Here are some specifications of the Osborne Computer.

An interesting fact worth noticing here is that the Osborne Computer weighed about 24.5 pounds/ 12 Kg approximately! So tell me now, can you call this a “laptop”? Certainly not!

The founder of Osborne Computer Corporation, Adam Osborne was the mastermind behind this innovative idea. Osborne 1 was a huge hit amongst the people and it gave a great profit to the company.

Later, after the success of Osborne 1, the company announced about two new computers (portable) named as Executive and Vixen. This announcement lead to a serious downfall of the company. The customers stopped buying the Osborne 1, instead waited for the new computers.

The downfall of the company resulted in the bankruptcy of the company. Thus, even the production of other to computers could not take place. This became a phenomenon and is often called as the Osborne effect.

The above situation is somewhat similar to the “Apple – Gizmodo” story. After seeing the iPhone 4G specs,   people would mostly wait for it, rather than buying the iPhone 3G. However, in this case the product was leaked, but in the above case it was announced by the company itself!

The post DYK Thursday – The First Ever Laptop Weighed 12 Kg! appeared first on Techie Buzz.