For the uninitiated, PayPal is an account-based system that lets anyone with an email address to securely send and receive online payments using their credit card or bank account. It is the most popular way to electronically pay for eBay auctions and it is becoming a easy way for merchants to accept credit cards on their online stores instead of using a traditional payment gateway. If you’re one of the many lucky Indians who happen to render their services abroad and earn in United States Dollars (US$), you certainly would have come across this term.

If you’re clean on all fronts and are not involved in any illegal transactions using PayPal, there’s not a lot for you to worry about. For Indian account holders, PayPal doesn’t provide many options to withdraw money. The only possible way till now is to ask for a cheque to be delivered at your address. The service itself costs US $5 and it being the only option available to withdraw funds, people have to wait for 21 days or more to deposit that PayPal cheque into their bank account in India.

Enter Xoom and things started to look a little rosy for PayPal account holders in India. Instead of waiting for that many days, Xoom promises to deliver your PayPal money within 3-4 days. Xoom enables its customers to send money internationally online, anytime. Xoom’s innovations speak for themselves. Some of the many selling points include Low fees (compared to other services like Western Union), Convenience (keep track of your transactions online), Reliability (a reputed company and guaranteed service) and Flexibility (options like direct deposit, cash pickup, secure debit card or home delivery).

There are a few things to be noted here. If you’re initiating a PayPal transfer from your own account, you’re not entitled to cash pickup. It has to be either via bank deposit or cheque which is issued in India by the Punjab National Bank. There are quite a few misconceptions floating around the web regarding PayPal and Xoom and most of them relates to withdrawing money from your own PayPal account to your Indian Bank account. People are confused if its indeed illegal. To solve this mystery, I sent this email to the Xoom Customer Service:

Hi,

I’ve a few questions related to Xoom services. Is it okay to transfer your own PayPal money to your own Bank Account in India? Is this completely legal? Also, are all Xoom transfers RBI approved? Please let me know if transferring one’s money in the above mentioned way violates the Foreign Exchange Management Act?

Thank You.

Here’s the reply that I got from their Customer Service within 30 minutes:

Dear Sumit,

Thank you for contacting Xoom Customer Service. Please be advised that you can transfer money from your own PayPal to own Bank Account in India. Also we want to let you know that all Xoom transfers are approved by RBI.

Please let us know if you have any questions.

I’m sure this would clarify a lot of doubts amongst Indians who are willing to transfer money from their PayPal account to their bank account in India. Its really simple and all you need is a verified PayPal account. Many people have received their money in less than 2 days. Its a lot better than waiting for an entire month to receive your cheque from PayPal. Also, PayPal will only issue a cheque once the amount to be withdrawn is more than US $150. Even Xoom doesn’t come for free. They’ll charge you US $8 per transfer for transferring up to US $500. Their exchange rates are usually Re. 1 lower than the current exchange rates. So, if you’re transferring a lot of money, you might lose out on quite a bit.

This concludes my short summary on PayPal and Xoom. I hope after reading this, you’ll be able to make a better decision on how to deal with the money in your PayPal account. Please note that, I’m in no way associated with PayPal or Xoom. I’m not trying to endorse either of them and all the above has been posted for general information only. People are advised to exercise caution and follow their own judgment in this regard as with anything else related to money matters.

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