Have you recently tried to open a new PayPal or Skrill account and failed to link it to your local Indian bank using your debit or credit card? Frustrating ain't it? It doesn't seem to work with almost all the Indian banks, probably except like Citibank, Standard Chartered, etc. Everytime you try to link/verify your debit/credit card issued by your bank to your PayPal account it fails or it gets declined. I have heard that with ICICI bank and few obscure nationalized banks it works. But I am not sure
There are many people who do not have an ICICI or one of those obscure government bank account (or do not wish to open one for the heck of having a PayPal or Skrill account). What does one do in such a scenario? First, cuss the hell out of the Indian government regulatory authorities (mostly RBI), then cuss the goverment, then cuss one's own luck and if there is still energy left cuss whoever one can think of. That's what I did recently when I tried to make my PayPal account work with my local Indian bank account.
Calling up or contacting Paypal doesn't help. They simply say it depends on the individual bank and they will not tell you which bank might be of help here. I tried, I failed. Speaking to the local banks is 98% times useless as the jackasses who would answer your query probably won't have a clue about transactions in foreign exchange in regard to payments or receipts. So you end up getting even more frustrated.
So is there a solution or a workaround this? Fortunately yes!!! I finally got my local bank account and card linked to my PayPal account and I am going to share the workaround with you. In case you are facing the same issue, it might be of help to you.
But before I share the trick or workaround, here is what they call the disclaimer.
* This has worked for me with HDFC bank. I finally got my bank account properly linked and PayPal confirmed it.
* This workaround is ONLY FOR PayPal and for RECEIVING PAYMENTS and not MAKING PURCHASES. IT WON'T WORK FOR PURCHASES.
* Rules change quite often and by the time you try this workaround (who knows when) it might not work. This is working as of today, i.e., April 26, 2015.
* All the fees and charges mentioned are as of April 26, 2015.
* You will be using this workaround at your own risk and with the full understanding and knowledge of the fact that you cannot hold me responsible for ANY loss to you, including but not limited to financial, emotional, reputation and both online and offline banking priviledges. Furthermore, you cannot hold me responsible for your online transaction error, mistakes, frauds, etc. To reiterate IF YOU DECIDE YOU THIS WORKAROUND, YOU DO SO COMPLETELY AT YOUR OWN RISK AND YOU CAN NEVER HOLD ME RESPONSIBLE FOR ANYTHING GOING WRONG.
Now a little background on what this fuss is all about.
Previously (sometime back), opening and operating a PayPal account was very simple. All you had to do was to register online and make sure that you had PayPal account balance (either by depostiing money to your PayPal account from your bank account or by using a debit/credit card or online transfer OR by getting some money from some one with a PayPal account and balance) and you were ready to make online purchases. lt was that simple. And when you received payments to your PayPal account you could keep the money lying in your PayPal account for as long as you wanted it to be. You could use this money from your PayPal account to make online purchases or send money to others (to their PayPal account) in a jiffy. When you felt like withdrawing the money for yourself, you made a request and PayPal would send you a check to your place. Simple ain't it? Well, that's how it was and it is history now!
Now things are much more complicated. Here is how it has changed.
No Indian can have a PayPal balance lying in their account for more than a day at the most. As simple as that. All the money in your PayPal account gets autowithdrawn to your linked bank account every day at the end of the day (PayPal's end of day timing) every day. You have no choice and it is for every Indian and required by the Indian authorities. I think this is simply to check black money. Government can't do much as long as the money is stashed outside of India. I think this is very good thing. However, you can still can use PayPal money to make online purchases. There is a small time window when you receive money to your PayPal account and when it finally gets autowithdrawn to your bank account at PayPal's end of the day. You can have upto a 24-hour window depending on when the money lands in your PayPal account. But most of the times it would be quite a few hours before the money gets transferred to your bank. You can use this period to make online purchases. Otherwise, to make a purchase online using PayPal account you will have to use the debit/credit card linked to your PayPal account. You transfer money to your PayPal account using THAT card and then you make the payment (or transfer money to another PayPal account) Note: AS AN INDIAN, YOU CANNOT TRANSFER MONEY TO ANOTHER PAYPAL ACCOUNT. Once again, required by Indian authorities and once again to put a check on black money and illegal transfers. You can only tranfer money through your bank account by checks, manual deposits, wire transfer or online money transfer. No you cannot even send money within India using Western Union or similar services for pretty much the same reason. No wonder postal money order system is still running!
Ok now that I have given some idea about the issue (for the uninitiated) here is the workaround.
It is actually very simple. It will cost you $1.95 (or about ₹130 at present exchange rate, refundable) and about ₹5 (HDFC bank charges, nonrefundable). So you will actually be spending only about ₹5 to make this work.
These are the steps (and only for HDFC bank and PayPal accounts):
1. Register for netbanking (online banking) for your HDFC account, if you not already registered.
2. Go to the HDFC's netbanking website. There you will find an option for creating virtual credit cards (or as HDFC calls them NETSAFE). You should have atleast about ₹150 in your bank account.
3. Create a NETSAFE virtual credit card for an equivalent of $1.95. Which at the present rate is about ₹130. This money will be used by PayPal to charge to your NETSAFE virtual credit card for verification.
4. HDFC will give you the NETSAFE virtual card's #, expiry date, type and CVV #. Note them down.
5. i. Now go to PayPal. Link your bank account by entering all the details. Your bank account name should be same as PayPal account name or it won't work. PayPal will then make two small deposits (usually less than ₹5) to this bank account. The deposits should reflect in your bank statement within 2-5 business/working days. Check your bank statement and note down the amount of these small deposits.
II. O nce you have the deposit amounts, log in to your PayPal account and go back to bank account linking page and enter the deposit amounts when asked for and let PayPal verify it. Once properly verified your bank account will be linked to your PayPal account.
6. Once linked, go for credit/debit card verification in the PayPal website. You will be asked to enter credit/debit card details. Ener the NETSAFE virtual card (that you just created) details and go for verification.
7. Now, PayPal will charge $1.95 to this credit card and it should go through fine and you should receive a welcome kit from PayPal to your registered email. Now you are ready for RECEIVING PAYMENTS/DEPOSITS to your account.
8. Check your bank statement 3-5 business/working days or sometimes even more later. You will find the PayPal charge listed and there is a code to the charge details. Note down that code.
9. Go back to your PayPal account and click on "Verify" for card details. You will be asked to enter the charge code. Enter the code you noted down from your bank statement. Once done, your PayPal account is all set. PayPal will refund the money to your account (i.e., $1.95 within 3-5 business/working days after you have verified your card).
10 VERY IMPORTANT: NETSAFE CARDS have time validity of 48-72 hours and so are temporary. After the card has expired, all the unused balance from the card will be credited back to your HDFC account and the card will cease to exist. FOR THIS REASON YOU CANNOT MAKE PURCHASES THROUGH PAYPAL ACCOUNT IF YOU HAVE USED A NETSAFE VIRTUAL CARD FOR DEBIT/CREDIT CARD LINKING. By the time your virtual card gets completely verified by PayPal it would have expired and become invalid. FOR THIS SERVICE HDFC RIGHT NOW CHARGES ABOUT ₹5 AND IT IS NOT REFUNDABLE.
So that's it! I hope this helps. Please share if you something to add. I am not sure but I think this process should work with other banks which allow virtual card creation. Will need more info on that. But that's for later...
There are many people who do not have an ICICI or one of those obscure government bank account (or do not wish to open one for the heck of having a PayPal or Skrill account). What does one do in such a scenario? First, cuss the hell out of the Indian government regulatory authorities (mostly RBI), then cuss the goverment, then cuss one's own luck and if there is still energy left cuss whoever one can think of. That's what I did recently when I tried to make my PayPal account work with my local Indian bank account.
Calling up or contacting Paypal doesn't help. They simply say it depends on the individual bank and they will not tell you which bank might be of help here. I tried, I failed. Speaking to the local banks is 98% times useless as the jackasses who would answer your query probably won't have a clue about transactions in foreign exchange in regard to payments or receipts. So you end up getting even more frustrated.
So is there a solution or a workaround this? Fortunately yes!!! I finally got my local bank account and card linked to my PayPal account and I am going to share the workaround with you. In case you are facing the same issue, it might be of help to you.
But before I share the trick or workaround, here is what they call the disclaimer.
* This has worked for me with HDFC bank. I finally got my bank account properly linked and PayPal confirmed it.
* This workaround is ONLY FOR PayPal and for RECEIVING PAYMENTS and not MAKING PURCHASES. IT WON'T WORK FOR PURCHASES.
* Rules change quite often and by the time you try this workaround (who knows when) it might not work. This is working as of today, i.e., April 26, 2015.
* All the fees and charges mentioned are as of April 26, 2015.
* You will be using this workaround at your own risk and with the full understanding and knowledge of the fact that you cannot hold me responsible for ANY loss to you, including but not limited to financial, emotional, reputation and both online and offline banking priviledges. Furthermore, you cannot hold me responsible for your online transaction error, mistakes, frauds, etc. To reiterate IF YOU DECIDE YOU THIS WORKAROUND, YOU DO SO COMPLETELY AT YOUR OWN RISK AND YOU CAN NEVER HOLD ME RESPONSIBLE FOR ANYTHING GOING WRONG.
Now a little background on what this fuss is all about.
Previously (sometime back), opening and operating a PayPal account was very simple. All you had to do was to register online and make sure that you had PayPal account balance (either by depostiing money to your PayPal account from your bank account or by using a debit/credit card or online transfer OR by getting some money from some one with a PayPal account and balance) and you were ready to make online purchases. lt was that simple. And when you received payments to your PayPal account you could keep the money lying in your PayPal account for as long as you wanted it to be. You could use this money from your PayPal account to make online purchases or send money to others (to their PayPal account) in a jiffy. When you felt like withdrawing the money for yourself, you made a request and PayPal would send you a check to your place. Simple ain't it? Well, that's how it was and it is history now!
Now things are much more complicated. Here is how it has changed.
No Indian can have a PayPal balance lying in their account for more than a day at the most. As simple as that. All the money in your PayPal account gets autowithdrawn to your linked bank account every day at the end of the day (PayPal's end of day timing) every day. You have no choice and it is for every Indian and required by the Indian authorities. I think this is simply to check black money. Government can't do much as long as the money is stashed outside of India. I think this is very good thing. However, you can still can use PayPal money to make online purchases. There is a small time window when you receive money to your PayPal account and when it finally gets autowithdrawn to your bank account at PayPal's end of the day. You can have upto a 24-hour window depending on when the money lands in your PayPal account. But most of the times it would be quite a few hours before the money gets transferred to your bank. You can use this period to make online purchases. Otherwise, to make a purchase online using PayPal account you will have to use the debit/credit card linked to your PayPal account. You transfer money to your PayPal account using THAT card and then you make the payment (or transfer money to another PayPal account) Note: AS AN INDIAN, YOU CANNOT TRANSFER MONEY TO ANOTHER PAYPAL ACCOUNT. Once again, required by Indian authorities and once again to put a check on black money and illegal transfers. You can only tranfer money through your bank account by checks, manual deposits, wire transfer or online money transfer. No you cannot even send money within India using Western Union or similar services for pretty much the same reason. No wonder postal money order system is still running!
Ok now that I have given some idea about the issue (for the uninitiated) here is the workaround.
It is actually very simple. It will cost you $1.95 (or about ₹130 at present exchange rate, refundable) and about ₹5 (HDFC bank charges, nonrefundable). So you will actually be spending only about ₹5 to make this work.
These are the steps (and only for HDFC bank and PayPal accounts):
1. Register for netbanking (online banking) for your HDFC account, if you not already registered.
2. Go to the HDFC's netbanking website. There you will find an option for creating virtual credit cards (or as HDFC calls them NETSAFE). You should have atleast about ₹150 in your bank account.
3. Create a NETSAFE virtual credit card for an equivalent of $1.95. Which at the present rate is about ₹130. This money will be used by PayPal to charge to your NETSAFE virtual credit card for verification.
4. HDFC will give you the NETSAFE virtual card's #, expiry date, type and CVV #. Note them down.
5. i. Now go to PayPal. Link your bank account by entering all the details. Your bank account name should be same as PayPal account name or it won't work. PayPal will then make two small deposits (usually less than ₹5) to this bank account. The deposits should reflect in your bank statement within 2-5 business/working days. Check your bank statement and note down the amount of these small deposits.
II. O nce you have the deposit amounts, log in to your PayPal account and go back to bank account linking page and enter the deposit amounts when asked for and let PayPal verify it. Once properly verified your bank account will be linked to your PayPal account.
6. Once linked, go for credit/debit card verification in the PayPal website. You will be asked to enter credit/debit card details. Ener the NETSAFE virtual card (that you just created) details and go for verification.
7. Now, PayPal will charge $1.95 to this credit card and it should go through fine and you should receive a welcome kit from PayPal to your registered email. Now you are ready for RECEIVING PAYMENTS/DEPOSITS to your account.
8. Check your bank statement 3-5 business/working days or sometimes even more later. You will find the PayPal charge listed and there is a code to the charge details. Note down that code.
9. Go back to your PayPal account and click on "Verify" for card details. You will be asked to enter the charge code. Enter the code you noted down from your bank statement. Once done, your PayPal account is all set. PayPal will refund the money to your account (i.e., $1.95 within 3-5 business/working days after you have verified your card).
10 VERY IMPORTANT: NETSAFE CARDS have time validity of 48-72 hours and so are temporary. After the card has expired, all the unused balance from the card will be credited back to your HDFC account and the card will cease to exist. FOR THIS REASON YOU CANNOT MAKE PURCHASES THROUGH PAYPAL ACCOUNT IF YOU HAVE USED A NETSAFE VIRTUAL CARD FOR DEBIT/CREDIT CARD LINKING. By the time your virtual card gets completely verified by PayPal it would have expired and become invalid. FOR THIS SERVICE HDFC RIGHT NOW CHARGES ABOUT ₹5 AND IT IS NOT REFUNDABLE.
So that's it! I hope this helps. Please share if you something to add. I am not sure but I think this process should work with other banks which allow virtual card creation. Will need more info on that. But that's for later...