While this article is quite old, I had never realised it until negotiating a sale with a person in Singapore
http://techcrunch.com/2013/02/18/paypal-stops-personal-payments-in-singapore/


PayPal Stops Personal Payments In Singapore


PayPal will stop allowing personal payments in Singapore on February 20. It said in an email to members that this was due to “regulatory instructions”.

People will still be able to make commercial payments for goods and services with their accounts, such as at online merchants, or receive funds, but we can expect that fund transfers between personal accounts will be halted.

They’re not clear on exactly what sort of fund transfers will be stopped, but this seems in line with what happened in other countries. According to reports, PayPal Japan’s personal account holders stopped being able to receive or send money to individuals in 2010, and now have to pay a business fee for transactions. The same year, users in Taiwan and Brazil reported that they stopped being able to send personal payments.


PayPal’s wording seems to suggest that users will still be able to receive payments from “sales and trading”, so this shouldn’t hurt individuals selling on eBay (which owns PayPal). However, many of the smaller blogshops in the region are run by individuals, and those transfers are to personal accounts. Blogging platform, LiveJournal, has said it has a global pool of over 50,000 blogshops. It said that the transaction volume of Singapore blogshops was $80 million in that year alone.

Update: PayPal responded to say that personal payments such as cash gifts or living allowances won’t be allowed. Underlying goods and services will be permitted, and this extends to commercial payments made and received by Singapore users covering personal, “premier” or business accounts. Users can also still receive funds from PayPal users outside of Singapore, and that is dependent on whether personal payments are allowed in the sender’s country. Blogshops, you can rest easy.

 

Yup, gifts are disallowed here in Singapore. A friend told me they were concerned about money laundering. IIRC gifts did not attract a fee.

If I buy a watch for example (as I did from Kyle last year), I send money over to Kyle's Paypal and a fee is charged. Seems to be that there's still no difference in that a sum of money moves from my Paypal to Kyle's (as would a gift) except a fee is charged.

 

Frankly, I'm surprised that this hasn't yet spread significantly. I fully expect that it will, as insolvent governments around the world continue to increase capital controls.

 

Tony, it's not just about government controls. People are abusing the Paypal system and Paypal has made changes to the "gift" option to combat that.

What I can't believe is there are people blatantly asking for funds to be sent via "gift" right in their sales listings! That, and asking for Paypal fees to be covered by the buyer are against PP's rules.

 

here in many parts of South America there never was a GIFT option ... only GOODS or SERVICES ...

 

Believe me, gator, it's many more countries than Brazil.

It is true that Singapore does not suffer from the crushing debt loads of many other countries, and yes, it is largely about control. But that control is primarily about taxing every transaction, which is becoming increasingly important for many countries around the world.

I am living in Europe, and I can assure you that various forms of capital controls are already in place, and becoming more onerous. Cash transactions are increasingly limited, and *serious* people in the power structure are proposing outright bans on the use of cash. Wiring money in or out of many countries is being more tightly controlled all the time. No more than X amount, no more than one transfer to the same person on any given day, etc.

The money laundering issue is a transparent pretext*. Governments across the world are broke, or heading there rapidly. They are tightening their grips in what will prove to be failed attempts to deal with debt loads which far exceed any possible tax revenues that they might find. Furthermore, these type of actions always fail in the long run, as people will reach a point at which they will actively seek to avoid the system. Of course that is happening already.

I wish that I were paranoid, but unfortunately, my observations are based on reality.

 

I'm somehow missing the point here. The PayPal fees are not government fees are they? and when a transaction is made as gift there is still an electronic record of it so it can be tracked just as well as when it's any other type of transaction. Yes sales and services taxes can be charged separately when buying goods but most good that are purchased as gifts are second hand goods.

The biggest difference is that when paying gift the buyer is unprotected while paying for goods and services gives the buyer protection. In this respect limiting gift purchases is limiting scams and protecting the costumer. I would think that has a larger impact than taxation and certainly " regulatory controls and records" as every transaction is being recorded.

I would thing that certain countries commercial laws and.costjmer protection laws conflict with PayPal " gift" policies, and in such cases the function is void.from the system. For example if country x makes PayPal directly liable for every transaction or scam regardless of the "tag" if I go to the department of consumer affairs and complain about a fake rolex I purchased and the country forces PayPal to pay me back....I should think PayPal will protect themselves fast.

I am guessing though....

 

In my case at least it is not that I am assuming that Paypal gift is primarily used to skirt taxes etc. Quite the opposite. That is why I don't think that is the driving factor on these changes. After all any government has many ways to look into fraudulent transactions, customs fees etc outside of what payment service is used.

What I do 'Know" outside of any assumption is that there are many cases where costumers do pay for services and goods through paypal Gift, and I do know that in some cases those transactions go wrong, or the wrong product is sent etc and that the buyer is left without protection through Paypal when using "gift" payments

I also know in some cases the buyer will then open a case outside of Paypal to look for a solution, a return or to denounce the scammer.

What I do assume is that in some cases Paypal will not be made accountable as they have clear policies and it is the buyer and seller who are abusing a system and committing "fraud" In other cases the government or country laws may simply supersede the Paypal policies, making Paypal responsible for facilitating a transaction without security and accountability procedures in place (outside of policies). In such cases it is easier to not have the service in question than to police it.

In my experience people don't use the "gift" option as sellers to save fees, they do it to avoid the buyers from claiming their money back within 6 months (i think that's the paypal limit) in other words a buyer that sells a Rolex Daytona for 10G cares less about the fee than about the seller returning the watch half a year later and getting their money back in full. This is specially the case in countries like the US where "bank transfers" are not often used as payments methods.

 

After sending 3 gift payments in a month (some years ago), I got an email from PayPal telling me that if I continued this, my account would be terminated. As you say, gifts and buyer paying fees are explicitly prohibited by PayPal's terms of service. Some forums get this: candle power forums spells it out in a sticky at the top of B/S/T. Some forums don't: probably 70% of sellers at bladeforums say "buyer pays fees" or "net to me."

 

I've pretty well stopped using PayPal at all especially when Taking payments for watches etc. Too much risk on seller side and fees are nuts. I go bank wire now.