In response to new Reserve Bank of India (RBI) requirements, PayPal is imposing further restrictions on its service in the country.
In a blog, PayPal corporate communications staffer Dickson Seow says the RBI is enforcing new rules "governing the processing and settlement of export-related receipts facilitated by online payment gateways".
Consequently, from 1 March, the eBay unit says merchants in India cannot receive payments from abroad of over $500 per transaction.
In addition, merchants will no longer be able to use any balance in their PayPal accounts to buy goods or services. Instead all payments must be transferred into Indian bank accounts first.
PayPal has already being forced to suspend personal payments to and from India after falling foul of RBI licensing rules last February.