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PayPal suspends India service

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PayPal, eBay's payment system, has suspended all payments to personal accounts in India.

In fact the online payment service took the action on Saturday, but its UK arm still doesn't know how long the suspension is likely to last.

A blog post says personal payments and transfers to Indian banks have been suspended "while we work with our business partners and other stakeholders to address questions they have about the service".

The post, available here, notes that you can still make commercial payments to India, but merchants won't be able to withdraw the funds.

Apart from irritating Indian eBayers, the unexplained action will also infuriate smaller technology and design freelancers who use the system for cheap money transfers.

Some bloggers suggest the problem is between PayPal and the Reserve Bank of India - India's central bank and financial regulator.®

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