PayPal is an online payment system run by an American multinational company. It is a financial technology company that operates in most countries that use online money transfers. It is an electronic substitute for paper methods such as checks and money orders. The company processes payments and charges businesses a fee. We are now going to talk about how to use PayPal in India.
PayPal India has closed their domestic payment transactions and now serves businesses only for cross border transactions. Individual use of PayPal or domestically sales have been closed in order to specialize in products for Indian businesses to sell internationally.
How to Open a PayPal Account in India
We are going to go over how to open a PayPal account in India. This is if you are signing up for:
- personal use to shop on the site
- as a freelancer
- or as a business
- your PayPal account will be free to open.
The following is a detailed explanation of how to open a PayPal account:
- On the PayPal website, click on the Sign-Up button in the top right corner
- Choose between opening an Individual Account or a Business Account, as per your requirement
Select open an Individual Account and then:
- Click on Next
- Confirm your India-based mobile number
- Follow the steps to open your account
Select to open a Business Account:
- Click on Next
- From the dropdown menu, choose in which way you want to accept payments and enter your annual sales volume. PayPal will propose the best way for you to receive that is in line with your business.
Click Next to proceed
- Enter the email address you want on the account. Check that email’s inbox for an email from PayPal to confirm with the link provided.
- Next, you need to enter the details your business, including your business’ PAN details:
- Proceed with the steps and finish the KYC questions in order to open your account. Double-check that your business bank account has the same PAN number as the one that you are using to open your PayPal account.
- You must link your debit or credit card or bank account to your PayPal account in order to:
- To begin using your account to make payments to sellers or suppliers
- or to receive money from customers
- Individuals can link their debit or credit card by going to Payment Methods and then Link Debit or Credit Card.
Businesses have to go to Payment Methods and then link their bank account.
It is crucial to finish opening your PayPal account by verifying your card or bank account.
For individuals, you will receive an OTP confirmation on the mobile number linked with your debit or credit card to validate and verify your card.
For bank accounts, like those for a business, you will receive 2 small deposits between ₹1.01-1.50 in your bank account. This may take 4-5 business days to take place. Once the amounts have been deposited, you must enter in the exact amounts to verify your account in PayPal.
How to use PayPal India to receive money
In order to receive money in your PayPal business account, first make sure your account is open and verified.
After that you can consider different PayPal payment solutions that are appropriate for your business to receive funds from international customers.
- Website Payments
- PayPal Checkout
- Online invoicing
- PayPal.me links
- Email Payments
- As a seller, you can also use the Request Payment feature on PayPal to get payments by using the clients’ email addresses.
How to Use PayPal India to Pay Someone
If you want to use PayPal as an individual in India, you will be unable to send money to friends, family or clients. The PayPal wallet feature is unavailable in India for personal use.
What you can do is utilize PayPal to make purchases with the sellers that use Paypal worldwide through the PayPal mall for goods and services.
In order to purchase from a PayPal merchant or seller, you must link your Palpal account to your debit or credit card or to your bank account. Paypal does not permit the filling of a digital wallet in their system in India.
Your debit or credit card can be linked to the method of payment on your dashboard. This can be done after signing up for PayPal and clicking the Link Debit or Credit Card and entering your card details.
Your card information will need verification in order to proceed.
If your business is registered, then it becomes possible and easier to send payments. Here are two ways to send a payment to someone through PayPal.
The Send button in the PayPal app can be used along with the person’s name, phone number, or email address to send the amount
On the PayPal website, you can go to Send and Request and clock Pay for goods and services
Money can be sent abroad through the Send and Request tab on the dashboard
Is a Bank Account Required for PayPal India?
A bank account is not required to make purchases as an individual on PayPal. A valid debit or credit card is required.
As a business, a bank account will be required in order to use your Paypal business account.
With PayPal a daily withdrawal from your PayPal balance into your bank account is mandatory, so it must be connected to a bank account for you to function.
Is it possible to use PayPal India without a card?
In order to use Paypal without a card you can link your Indian bank account to your account.
This can be done under the Payments Method tab on your dashboard.
Businesses can have payments made to their Paypal account. These will be withdrawn from your local bank account daily. Your bank account can also be linked in order to make payments to clients and suppliers abroad through PayPal.
Opening and maintaining a PayPal account is free.
Is there a fee to use PayPal India?
PayPal is free to open and maintain, no matter what kind of account you have.
The fees are compensated by your account activity.
Businesses do have to pay fees whereas customers and personal users do not.
Paypal India Charges
The following are the major payment charges for businesses in India on PayPal:
PayPal decides its own exchange rate. This might mean that you will pay a marked up rate on international transactions that arrive. The PayPal rate will most likely be different from the mid-market rate. The mid-market rate is the rate that banks use and is also the one seen on Google and Reuters.
By setting their exchange rate to be different from the mid-market rate, they are able to charge you a fee on every unit that is converted to INR.
Transaction Fee (International)
For each international transaction, there is an international transaction fee of 4.4% + a fixed fee depending on the currency of the funds that are arriving
Transaction Fee (Domestic)
There is a standard domestic fee of 3% + ₹3 on each transaction.
If the customer uses UPI or BHIM for their payment, the transaction fee is 2.5% + ₹3.
Currency Conversion Fee
A currency conversion fee of 3% exists in addition to the exchange rate whenever you are converting an amount you received into INR. With the way PayPal functions in India, you must pay the currency conversion fee on a daily basis, when the funds are withdrawn to your account.
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PayPal is an online payment system run by an American multinational company.
PayPal India has closed their domestic payment transactions and now serves businesses only for cross border transactions.
Businesses do have to pay fees whereas customer and personal users do not.
A currency conversion fee of 3% exists in addition to the exchange rate whenever you convert an amount you received into INR. With how PayPal functions in India, you must pay the currency conversion fee daily, when the funds are withdrawn from your account.