Using PayPal in India as a Merchant

About PayPal in India

PayPal Services in India are provided by PayPal Payments Private Limited located at Mumbai in the state of Maharashtra.

You can send & receive payments in INR and supported international currencies via PayPal in India. Sending of payments for purchasing goods & services internationally is also possible using cards issued in India.

Although globally PayPal is considered a fund transfer wallet, it does not function as a funds storage or digital wallet for Indian users. It functions more as a payment gateway/processor.

PayPal is already being used as a payment gateway by many well-known brands in India such as FirstCry, BookMyShow, Myntra, etc. and this trend is increasing.

Using PayPal as a Merchant

To start using PayPal as a merchant you have to signup for an account on the PayPal website. Signup is quick and free of cost, and the signup process includes steps for account KYC.

KYC Requirements for PayPal in India

PayPal conducts two levels of Know Your Customer (KYC) based on merchant need to accept payments. You can find KYC requirements listed here.

The KYC requirements for receiving International Payments is minimal. To additionally also receive local INR payments you will need to provide documentation.

Domestic INR Payment Settlements by PayPal

You can receive domestic INR payments in India from Indian PayPal users (all account types), and from cards (Premier/Business accounts only). Service charges are 2.5% + ₹3 + GST @18% (on charges) currently. Since the merchant is located in India, there are no currency conversion fees on receiving setlements for INR payments.

International Payment Settlements by PayPal in India

sample paypal fee calculation for international payments to merchants in india

You can receive international payments in supported international currencies from PayPal users (all account types), and cards & bank accounts (Premier/Business accounts only). Service charges are 4.4% + $0.30 + GST @18% (on charges). According to PayPal, you can apply for lower rates when your account is in good standing and you’ve met a qualifying monthly sales volume.

paypal india fee for international payments

Additionally,PayPal’s local bank also levies a charge of 3.5% on balance for currency conversion to INR followed by NEFT transfer. PayPal will deduct this amount from your settlement. sample calculation sheet

For GST-registered merchants, PayPal’s Indian bank (Citibank) provides Foreign Inward Remittance Certificate (FIRC) to merchants on payment of an additional fee. You can find the details here.

Receiving settlements from PayPal in India

To receive payment settlements in India you need to link a local Indian bank account. There is no list of supported banks available. Generally any bank with an IFSC, to which funds can be transferred using NEFT, should work with your PayPal account.

As per a RBI directive, all money received in your PayPal wallet is auto-swept into your bank account by the end of the day. So the funds reflect in your bank account in India within 24–48 hours of the payment transaction.

For GST-registered merchants, GST charged by PayPal in India can be used as Input Tax Credit.

Contacting Customer Support for PayPal in India

PayPal offers several options to get support. To access these support options, you need to sign-in and visit this page.

Additional benefits of using PayPal in India

Another benefit for merchants using PayPal in India is their Seller Protection program. This protects merchants from fraudulent claims or chargebacks on eligible products. PayPal currently is not charging any fee for this program and any eligible product sold via PayPal is protected by this program.

Free Local Bank Transfer module launched for India

We are pleased to inform our Indian users that this week we have added the complimentary Local Bank Transfer module to the list of payment gateway/processor modules available for India.

NEFT/IMPS is a popular payment method for Indian users with Net Banking access. In most cases there are no fees levied by the bank to receive fund transfers using this method.

However, to use this payment method in an online payment setting you need to display the correct details when the person has the intention to pay. So now you can use this free payment mode with your pMP payment pages.

If you have created a BHIM/UPI ID or virtual payment address for your bank account, you can optionally display that as well for faster payments. This is currently a free payment mode for both sending and receiving payments.

For advanced users who pass a unique reference or custom value with the pMP short link, the custom value will now be displayed to the payer to add in the Transfer Description (for NEFT/IMPS) and Remarks (for BHIM/UPI).

Disclaimer: We display the latest details as entered by you into the payMyPage system. We have no way of checking/ensuring that you have entered the correct details for your bank account, or that your payer has used the details as displayed. Hence, we will not be responsible for any incorrect bank transfers.

Please note that we will not charge any fee (even in the PAID plan) for these payment modes. We do not be track these payments modes so we cannot provide any details of payments made using these payment methods. For transaction details of payments made using these payment modes please use your bank account statement.

PayPal INR payments enabled in PayPal module

According to PayPal India:

"In line with the Govt of India's Gazette Notification pertaining to Subsidizing MDR charges on Debit Cards/ BHIM UPI/ AePS transactions of value less than or equal to INR 2000 dated 27th Dec 2017, we are announcing a promotional pricing of 2.5%+ INR 3 up-to 1 January 2020 for all domestic payments."

This morning PayPal India announced that Indian PayPal users can accept payments in INR for domestic transactions.

To enable INR payments in your PayPal account you will need tologin to your PayPal Business account and complete a domestic KYC process at this link.

We have updated the payMyPage (pMP) system to allow you to accept PayPal payments in INR and have already taken care of the technical part of enabling the display of the PayPal INR payment option to visitors from India.

However, this option will only work if you have successfully completed domestic KYC with PayPal. You can activate this feature by checking the box in your PayPal module settings after logging-in on this page.

Once this is done, if your payment page has a price mentioned in INR then PayPal will appear as a payment option for INR payments.