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.

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.

Add Online Payments To WordPress Website

Adding Online Payments To WordPress

To add online payments to WordPress you must first identify how you wish to present your products and collect payments. You can present your products in a standard e-commerce format with a shopping cart and checkout payment options. Another way is to present your products in a page or post and use links to collect payments via payment pages.

WordPress and WooCommerce

As we mentioned earlier, one method to add online payments to WordPress is to use to convert your website to an online store by adding the WooCommerce plugin. WooCommerce adds an online store with a shopping cart to your WordPress website.

Using WooCommerce the purchase process will as follows:
Product Page > Add to Cart > Login > Checkout > Payment

If you choose to go this route you will need to research payment gateways that offer WordPress/WooCommerce extensions. Most modern payment gateways these days offer this support. Simply signup with the payment gateways and download their WordPress plugin or WooCommerce extension.

Once you have installed WooCommerce, install the payment gateway plugin/extension, and activate it with your payment gateway account credentials.

Pros:

  • Online user account management on your WordPress website for your customers.
  • Online order and inventory info management on your WordPress website for your customers.
  • Easy installation and setup.

Cons:

  • Payment gateway extensions may be paid extensions to purchase from the WooCommerce store.
  • Multiple steps for customers to go through before paying.
  • Requires your customer to login to make payments.
  • Will not work with a non-WordPress website if you plan to switch in future.

WordPress and payMyPage / Payment links

Sometimes you may wish to present each product in a dedicated page or post with a purchase option at the end like a sales letter. In such cases you would want to offer a direct payment option for immediate purchases.

Payment links i.e. links to hosted payment pages is ideal for such a scenario. Many payment gateways already offer this option. Simply signup with such a payment gateway and create a payment link for each product. Then use these links in your page or post in the form of Buy Now link or button.

Payment links also give you the flexibility of using direct payment links in places other than your WordPress website such as emails, chats, social media posts, etc.

Using this method purchase process will be as short as:
Product Page > Payment

Pros:

  • Payment links/pages are available as a free service.
  • Allows for quick impulse purchase by your customers.
  • Customers can go to the payment page without a login.
  • Works with WordPress or non-WordPress websites allowing for switching websites in future.
  • Easy to use just like normal web links.

Cons:

  • Order and inventory information will need to be handled offline/manually.
  • Customer account management will need to be handled offline/manually.

payMypage (pMP) offers power-packed payment pages where you can activate more than one payment gateway for your payment pages and get more flexibility in how you get paid.

For example to show the local payment gateway payment options for your local buyers and PayPal payment options for your International buyers:

  1. Activate a local payment gateway module (where supported)
  2. Activate the PayPal module (where supported)
  3. Create a payment page for each product.
  4. Set local currency price and USD price for each product.
  5. Add the payment page links in your WordPress product page/post content in the form of Buy Now links or buttons.

With pMP you can add more info to your payment pages and also customise the look. You can also pass a custom value or identifier through the payment page link. more info

PayPal Presentation Terms

According to PayPal the following clause will be added to their agreement:

1.5 Presentation of PayPal

You agree to provide equal treatment to PayPal and/or other payment methods or marks you offer at your points of sale (e.g. websites or mobile applications). This includes at least equal or substantially similar: logo placement, position within any point of sale, and treatment in terms of payment flow, terms, conditions, restrictions, or fees, in each case as compared to other marks and payment methods at your points of sale.

In representations to your customers or in public communications, you agree not to mischaracterize PayPal as a payment method or exhibit a preference for other payment methods over PayPal.  Within all of your points of sale, you agree not to try to dissuade or inhibit your customers from using PayPal or encourage the customer to use an alternate payment method.  If you enable your customers to pay you with PayPal, whenever you display or exhibit the payment methods that you accept (either within any point of sale or in your marketing materials, advertising and other customer communications) you agree to display the PayPal payment marks at least as prominently, and in at least as positive a manner, as you do for all other payment methods.

This morning PayPal India announced upcoming changes to their legal agreements effective 13th November 2018.

One of them will introduce a requirement on how PayPal payment option is displayed on user websites/mobile apps.

We are already compliant with this upcoming requirement and present PayPal payment options in the same manner as the other payment options.

If you have any other places where you have displayed PayPal as a payment option, you may want to take a look at their presentation again.

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.