PayPal Russia PayPal RU NPO

2024: Introduction of fees for inactive accounts in Russia

In September 2024, the PayPal payment service announced the introduction of a commission for inactive accounts for users from Russia. From October 7, 2024, a commission of ₽3,5 thousand annually will be charged from accounts that have not been used over the past 12 months, but on which there is a positive balance. The innovation will affect both personal and corporate accounts. The money will be written off from the balances.

According to RBC, an account into which the user did not enter and did not use to withdraw funds for a year is considered inactive. If you have less than ₽3,5 thousand at the time of the debit, PayPal will clear the entire balance. This provision applies to accounts with any positive balance, regardless of currency. At the same time, users who actively use their accounts and make transactions will not be affected by the new rule.

𝓲

Unsplash

By September 2024, PayPal has not been operating in Russia for 2.5 years. The General director Dan Shulman said that the service stops opening new accounts for Russian users and suspends services for sending and receiving payments. Despite this, PayPal has retained the ability to withdraw funds to existing accounts for a certain period of time to ensure that the remaining funds are distributed in accordance with the law. The new newsletter notes that users who disagree with the introduction of the commission have the opportunity to close their accounts by October 7, 2024.

By September 2024, the PayPal service no longer opens new personal and corporate accounts for users from Russia. Moreover, within the framework of the restrictions imposed, the sending and receiving of payments through the service in Russia is suspended. The payment service continues to operate in other countries and has about 325 million active users around the world, processing operations in 25 different currencies. PayPal is known for its ability to make purchases and transfers through an electronic wallet without specifying your credit card details.^[1]

2022: Suspension of work in Russia and blocking all wallets of Russians

The electronic payment system PayPal has suspended the provision of services in Russia due to the unstable geopolitical situation in connection with the special operation in Ukraine. This became known on March 5, 2022, from the words of the general director of the payment service Dan Shulman^[2] to^[3].

A company spokesman noted that PayPal will support withdrawals "for a period of time, ensuring that account balances are distributed in accordance with PayPal laws and regulations^[4].

Since March 2, PayPal has stopped registering new users from the Russian Federation^[5].

On March 12, it was announced that PayPal would block all electronic wallets of Russians from March 18.

2020: Termination of domestic transfers in Russia

On July 1, 2020, it became known that the PayPal payment system terminated internal transfers in Russia. The company decided to change the business model and develop towards cross-border operations.

The new business model provides for the termination of internal e-money transfers between PayPal users in Russia... We plan to continue our development and growth in Russia, focusing our efforts in the field of our competitive advantages, - says a letter from PayPal to the Central Bank of the Russian Federation, excerpts from which  are provided by TASS.

PayPal stops domestic transfers in Russia

PayPal will abandon internal transfers in Russia from August 2020. Then the company will begin to move to a new business model, which implies an emphasis on cross-border operations of Russian users to send and receive payments

In 2019, PayPal's profit on domestic operations amounted to only 4%, according to a letter to the regulator. The company intends to maintain an office in Moscow.

PayPal notes that the company has assessed its activities in Russia over the past five years and has come to the following conclusion: the main competitive advantages are associated with international payments. These are transfers of Russian users to foreign sellers, as well as international clients of Russian companies.

The payment system told the regulator that the latest transfers are mainly received by representatives of small and medium-sized businesses that export goods and services abroad.

In Russia, PayPal is not very popular, and the broader functionality of the service is available in the United States, where the system also offers credit services. Unlike other wallets popular in Russia, PayPal will not help pay for housing and communal services, pay off the traffic police fine or pay for a purchase in an offline store. There is no way to invest or receive cashback in the service.^[6]

2018: Central Bank removes PayPal from the register of significant payment providers

The Bank of Russia excluded PayPal from the register of significant credit institutions in the payment services market, since the company does not meet the new selection criteria for this register, which were adopted in November 2017. This register was published on April 11 in the Bank of Russia Bulletin and on the regulator's website, Interfax reports. The Russian branch of the NGO PeiPal Ru LLC, which has been listed in the register since 2014, was excluded from it.

"According to the new requirements (editorial note: criteria for selection to the register), a credit institution can be recognized as significant only in that case, if the share of prepaid card e-transfers is more than 2% of prepaid card e-money transfers, made by all credit institutions in the Russian Federation for a calendar year, while the volume of electronic money transfers made using other bank cards is no longer taken into account. Thus, due to the change in the assessment criterion, NPO PeiPal RU is no longer included in the register of significant credit institutions. The Russian market remains one of the priorities for PayPal, "Interfax writes with reference to the PayPal press service.

2017: PayPal: Russia in TOP-20 countries by number of mobile payments 

 On December 20, PayPal presented data on mobile payments that were carried out through the global payment platform in the first three quarters of 2017. The popularity of this method of paying for purchases and transferring money is growing around the world: in the last year alone, the volume of mobile payments through PayPal has grown by 54% and amounted to almost $40 billion (by the third quarter of 2017).

According to the report, since the first quarter of 2017, Russia has been strengthening its position in the mobile payment market and now ranks fourteenth in terms of the number of users who made the first transaction with PayPal precisely through a mobile device.

According to a study by PayPal and Data Insight, in 2017, one in five purchases in online stores were paid for using a smartphone, and among young people under the age of 25, the phone has already become the most popular device for online shopping. Mobile purchases are gaining popularity: this year, 47% of respondents said they bought at least one product or service through a mobile gadget - up from 34% in 2016.

2015

PayPal stopped serving customers in Crimea

Шаблон:Main 'IT blockade of Crimea

The PayPal payment system, which allows you to pay for purchases in online stores and transfer payments around the world, has stopped serving Crimean residents since January 2015, according to an Interfax correspondent who received a letter from the company to deactivate the account.

As Crimean PayPal users save their money in the accounts of the payment system, the press service of the company replied that "in overwhelming cases there are no balances in the accounts of PayPal customers in Crimea." "In those rare cases in which the balances in the Crimean accounts of PayPal are positive, the funds are returned to customers to bank accounts or otherwise," added^[7].

"This was a very difficult decision for us, but, unfortunately, at present we cannot provide our services to customers in Crimea," the letter said, which the company sent to customers at night on Friday, January 23. Users report that PayPal has not accepted transfers to accounts in Crimea for about a week. This was written by the local publication "News of Crimea."

"As a global financial services company, we are doing everything we can to comply with legislation around the world. At the same time, we must constantly provide our customers with a high level of service. Unfortunately, we are currently unable to provide our services to customers in Crimea. We apologise for any inconvenience involved. At the moment, we are informing our customers about this, and PayPal Support is ready to help if questions arise, "the PayPal press service told CNews. The company said that there is "a small part of our 1.4 million active users" in Crimea.

Launch of servers in the Russian Federation for storage of data

PayPal placed Russia servers in for storing personal data of Russians. This is done in anticipation of the entry into force of the legislative rule obliging companies to store such data within the country.

According to the source, PayPal will collect data on transactions of electronic wallets registered in the Russian Federation in Russia. Another source familiar with the PayPal decision confirmed this information^[8].

"PayPal has built server capacity to store personal data of Russians in the company's office located in Moscow," he said. "They will store data on transactions of Russian users." According to the source, the servers are currently being tested. They withstand a load of 4-5 transactions per minute, he added

2014

Restrictions on anonymous payments

The PayPal payment system, which separated from eBay and became an independent financial company, has imposed restrictions on anonymous payments under Russian law since October 2014. Now the amount of a one-time money transfer of an unidentified payer is limited to 15 thousand rubles, and anonymous users cannot make payments to each other. An unidentified user can transfer funds only to owners of electronic wallets whose identity has been verified and confirmed.

The restrictions imposed by the PayPal payment system on anonymous payments are a consequence of the anti-terrorist law adopted in Russia, which significantly limits the circulation of funds sent and received by anonymous persons. The owners of PayPal accounts will have to re-go through the procedure for adopting a user agreement, in which the corresponding adjustments have been made, it will be enough for new customers of the payment system to go through the process of confirming the terms of the agreement once. According to the amended terms of the agreement, anonymous users have the opportunity to transfer money only to identified accounts, while the maximum possible amount for a one-time money transfer should not exceed 15 thousand rubles. The monthly limit for anonymous payments through the PayPal payment system is 40 thousand rubles and is regulated by Russian law.

For users whose identity has been identified and confirmed using the appropriate identification procedure, the maximum amount of a one-time money transfer increases to 550 thousand rubles. Nevertheless, there is a limit for sending money to PayPal users located outside the Russian Federation - the daily limit is $5 thousand. According to the same principle, the American payment system limited the possibility of sending funds by legal entities and individual entrepreneurs to anonymous users. As a reminder, PayPal recently became independent, separating from eBay to provide financial services to a wider range of customers, not limited to users of the world-popular online auction.

Acquiring Agreement with VTB24

In October 2014, the PayPal payment system announced the conclusion of an agreement with VTB24 Bank for acquiring in Russia. We are talking about processing payments from Visa and MasterCard credit cards in online stores connected to PayPal. The bank was selected based on the results of the tender.

2013: NPO "PeiPal RU" registered, start of work with rubles

• From September 17, 2013, the PayPal payment system will support Russian currency - users will be able to pay for purchases in online stores, accept payments, transfer money to accounts to other users and withdraw them through bank accounts in rubles.
• In May 2013, the Russian subsidiary of the PayPal payment system, a non-bank credit institution (NPO) PeiPal RU, received a license from the Bank of Russia under number 3517-K.
• On March 13, 2013, PeiPal RU LLC was registered with an authorized capital of 18 million rubles. Since October 2002, PayPal has been a payment tool and division of the American online marketplace eBay and allows customers to pay bills and purchases, send and accept money transfers. In early March, eBay, which entered the Russian market three years ago, joined the Russian Association of Internet Commerce Companies (AKIT). AKIT unites 15 stores: Wikimart, Digital White Wind, Tenth Dimension, Detsky Mir, M.Video, Svyaznoy, Sportmaster, Yutinet, Enter, KupiVIP, DomProm, Mallstreet, E5, Eldorado, Media Markt/Saturn.

According to the press service of the Russian payment electronic system Yandex.Money (a division of Yandex), PayPal has nothing to develop without eWow: it has no local payment expertise in different countries of the world, it does not compete with Internet banking. According to a study conducted in March 2012 by the TNS agency, on the use of various electronic money operators in large cities of Russia, the shares of these operators were distributed as follows: Yandex.Money - 15%, QIWI Wallet and WebMoney - 10% each, PayPal - 6%, Деньги@Mail.ru - 2%.

• In early 2013, eBay launched a Russian-language version of its site.

2012: Submission of documents for the establishment of NGOs

As it became known in April 2012, the Russian representative office of PayPal submitted documents to the Central Bank of the Russian Federation for the creation of a non-bank credit institution (NPO). The company will receive the right to issue electronic money and thereby strengthen its presence in the Russian market. Experts argue that the preparation and coordination of all the necessary papers can take from six months.

As a result, in 2012, Russian eBay users made purchases worth more than $400 million, and the base of active eBay users in Russia increased by more than 75%.

2011

Rumors of upcoming recruitment in Russia

On August 2, 2011, the founder of the recruiting agency announced PayPal's Russian plans. Pruffi Alyona Vladimirskaya

"According to rumors, this fall the five largest Internet companies will look for key employees in Russia," she wrote on the social network Facebook. These companies include PayPal and its owner, eBay online auction. According to Vladimirskaya, the Moscow office of PayPal should open in the fall of 2011, the company is going to invest $25 million in Russia^[9].

Later it became known that PayPal plans to open a small office in Moscow in late autumn or early winter, and eBay is going to try different schemes of work in Russia, said an employee of a venture capital company who advised PayPal. To work here, the online auction needs to solve the problems of delivery and payments. PayPal is negotiating shipping with DHL and other postal services, and payments will be made through PayPal, he explains.

PayPal representatives consulted with participants in the electronic payment industry on how to organize a business in Russia: how to register a non-bank credit organization here, how strong the banking lobby is and whether it will interfere with an international company doing business, says a source close to several Russian payment systems.

PayPal's desire to work in Russia is understandable, because it is one of the largest payment markets not mastered by the company, and it is also growing rapidly, says Viktor Dostov, chairman of the board of the Electronic Money association. The turnover of the electronic money market in Russia amounted to about 70 billion rubles in 2010. (plus 75% by 2009), of which 33 billion rubles. passed through Internet wallets. If PayPal nevertheless launches a business in Russia, it will become a serious competitor to local payment systems, Dostov said. The main advantage of PayPal is that it is a giant international integrator, to which hundreds of thousands of stores around the world are connected.

The law on data requires the opening of a non-bank credit institution in the Russian Federation

In June 2011, the law "On Personal Data" came into force, and now, to operate in Russia, a foreign payment system requires opening a non-bank credit institution or buying a Russian bank.

2010: Launching ebayrussia.ru without the ability to sell goods

In 2010, a Russian-language version was launched - ebayrussia.ru, but Russians could not sell goods on eBay. The last time PayPal representatives looked closely at the Russian market was in the summer of 2010.

2006: Permission to replenish e-wallets from bank cards

Until 2006, PayPal did not work with Russian users at all. Then she allowed them to replenish electronic wallets from bank cards, but it was impossible to transfer money from wallet to card, and then cash them out. De facto, Runet users could pay for foreign services, but the system did not accept cards from all Russian banks.

Notes