The paypal is the primary internet based banking transaction network for nearly quarter million Indians, who do small time services for various clients spread across US and Europe. For example, there are many software engineers in India who do small time projects for various clients through proven internet networks, and take payment in dollars through their paypal account.
Similarly there are lot of outsourcing workers in India, and also lot of bloggers in India, who take small payments ranging from 2 dollars to 50 dollars per task, from clients in US and Europe. And paypal checks out the identity of each of these people through credit card verification, and then only it allows transfer of funds to their bank accounts in India.
But all of a sudden Paypal has stopped all Indian transactions from January 28th without any notice, and worse still, it does not specify the real reason behind the issue. It is also not clearly specifying the time line for restoring the service.