Internet business in India is rising, and we all know how badly the government wants foreign investment in the country.
Before I get any further into the point of this article, let me tell you something about myself: I’m not a financial expert. In fact, I have very limited knowledge about finances. However, one thing that I know well is how freelancing works, how Paypal works, how Payoneer works … and what the Indian government is doing (or not doing) to promote online jobs in India.
There’s no denying the fact that the majority of income sources from freelancing or blogging come from western countries like the U.S. and the U.K, and that there are many payment options available for online professionals in western countries:
- You can use PayPal to receive payment (with limits, of course)
- You can request monthly check payments
- You can use direct ACH transfers. (Offered by Shareasale, Clickbank, etc.)
As a professional blogger, I have accounts on all major affiliate networks including CJ, Clickbank and many others. Living in India, I can tell you that receiving foreign payment is a quite a task. For example, we have to wait two weeks to receive a check, and then we have to wait another 20-25 days for the amount to be credited to our accounts.
So if a foreign check is issued to me on the 1st of the month, I won’t see that money for 40-60 days. That’s an epic two-month wait-time!
How the Indian government is making the receipt of foreign payment tough:
Do you remember when Paypal stopped services in India, and when Payoneer completely shut down its services in India? It was a time of great chaos for all bloggers and freelancers. After all, Paypal or Payoneer cards were unquestionably the best way to receive foreign payment immediately, and both were accepted by all major affiliate networks.
Later the Indian government & RBI allowed Paypal to resume its services, but with limitations. Along with the need to provide PAN card details, there is no way to use existing Paypal money for purchases. Additionally, one cannot send or receive payment from one Indian Paypal account to another Indian PayPal account.
At a time when e-commerce is growing rapidly in India and Paypal is a popular standard payment system globally, such limitations pose a serious roadblock for an entrepreneur. Yes, there are alternatives, but none that even come close to the efficiency of a system like PayPal or Payoneer.
India is a country full of freelancers, and a tremendous amount of work is outsourced from here. Paypal and Payoneer are the financial backbones of freelancers. However, with the Reserve Bank of India imposing significant limitations to Paypal and banning Payoneer from doing business in India, they are killing the young Indian freelancing community.
Payoneer has been one of the best services for anyone around the globe to receive payments from various U.S. merchants without any delay. By shutting down Payoneer in India, the Indian freelancing community has been significantly handicapped and is suffocating as a result.
- How many of you hold a credit card here?
- How many of you have a PAN card here?
A workable solution to the current situation:
Clearly the RBI has enforced multiple restrictions on the receipt of foreign funds. Even though Paypal has been allowed to resume some of its operations in India, the person receiving the funds must comply with numerous guidelines, disclose the details of every transaction, and provide his PAN Card number. (For readers who are not familiar with the PAN card, it is an alphanumeric number issued to a person for tax reference.)
It is commonly believed that only those who are above the age of 18 can apply for a PAN card. There are many bloggers in India who are under the age of 18. These young bloggers usually conduct business in the names of their parents, using their parents’ PAN card details to receive funds in their name.
The fact is, however, that a minor can indeed apply for a PAN card, (technically called a “minor PAN card”). While a minor cannot apply for a PAN card on his own, he can do so under the guardianship of an adult representative/parent. There is no special application form for a “minor PAN card” – form 49A is the form to use (see link below). I advise everyone whether over or under 18 to apply for a PAN card, as it is one of the best forms of proof of identity.
Moreover, if you are a minor who has started earning your own money, it is better for you to handle your own expenses and receive payments in your own name. This you can only do if you have your own PAN card.
Applying for a PAN card is fairly simple process, and you can even do it online by furnishing Form 49A online along with the prescribed fee of Rs. 96. (Note that if the applicant is a minor, proof of parents’ identity and address will be required.) The Income Tax Department issues a PAN card which is directly sent to your address.
I emailed the Payoneer team a few days ago, and it appears that they are not going to resume their services in India anytime soon. Furthermore, with a Paypal account one cannot receive personal payments within India, therefore we must, at least for now, stick with alternatives like 2checkout or ccavenue.
Thanks to Karan from Charteredclub for his useful input for this article.
Hopefully, in time we will see positive activity within the Indian government moving toward the support of Indian freelancers and bloggers.
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