How to open PayPal account in India

Aman Saxena

PayPal, one of the leading companies in global money transfers wallets offers its services to Indian residents.

But there are a few things to be aware of before you sign up for PayPal India, as it operates differently domestically.

To understand how PayPal India is unique, check out the breakdown of how PayPal works in India. And how you can open an account.

Sending money to India does not have to be complicated or expensive.

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How PayPal works in India

PayPal India lets individuals and businesses in India open accounts, but functionality and what you can do with PayPal India is limited.

First, individuals can only use PayPal to shop at the brands and boutiques in the PayPal Shopping home site.

⚠️ If you are looking to send money overseas to friends or family, PayPal India does not offer a wallet or money transfers

Instead, you have to link your debit or credit card to your account and can make payments for any purchases made with sellers on PayPal. That is it.

If you are a business owner, it is a different story.

You can receive international payments from 200 countries using PayPal. It can also be used for domestic payments as well, but it can be more expensive than native-Indian payment gateways.

As a registered business account, you can also send payments using your PayPal India account. So whether you have suppliers or partners to make payments to, you can use your account to do so.

But with a business account, it is a good idea to keep an eye on your fees. International payments have a fee of 4.4%+ a fixed currency fee. This is in addition to a currency conversion fee and a PayPal-set exchange rate.

This exchange rate is different from the mid-market exchange rate that banks use themselves. The mid-market exchange rate is also the one you see on Google. If you are paying an exchange rate that is different from the mid-market exchange rate, then there is a chance you are paying a markup on your rate.

One more thing to keep in mind is that with a PayPal India business account, your balance is cleared daily into your local bank account.¹

The Good ✅The Bad ❌
IndividualShop using PayPal• Cannot send or receive personal payments

• Cannot have PayPal Wallet

BusinessReceive payments or send paymentsCannot keep a PayPal balance more than 24 hours

How to set up PayPal account: Step by Step

Now if you want to open a PayPal India account, there are different processes for opening an individual account, or a business or freelancer account. Here is a step by step guide on how to setup your PayPal account in India:

For individuals

  1. Go to PayPal website and click on Sign up
  2. Select an Individual account
  3. Enter in your phone number and details
  4. Follow the instructions to complete and verify your account²

For Freelancers or Businesses

  1. Go to PayPal website and click on Sign up
  2. Select Business Account on the screen
  3. Choose from the dropdown menu what type of payments you are looking to receive and your annual sales volume in USD
  4. Next enter in your email address and provide details on your business, then hit Continue once you are done³

  1. Using the dropdown menu, provide additional business information like your business PAN and date of formation and once complete, press Continue

  1. PayPal may ask for additional information before your account can be opened. Follow the steps to complete and verify your account.

How to verify your PayPal account

To begin using your PayPal India account, you will need to complete the company’s verification process.

For individuals

You will need to first link your debit or credit card to your PayPal account. You can do that under Payment Methods on the dashboard and by submitting your card details.

You can confirm your debit or credit card with an OTP sent to the registered mobile number. Check out the section below about how to confirm a bank account. ⁴

For businesses

You need to activate and verify your account. Here is how you can do it⁵:

  1. After signing up, PayPal would have sent you an email to confirm your email address listed. Click on the confirmation button in the email.

  1. Next, you will have to complete the Know Your Customer (KYC) procedure to verify your business account. Depending on the type of business you do, you may be required to provide additional documents to PayPal.

  2. Link your business bank account to your PayPal account. Make sure your business bank account is valid and matches the PAN information you provided to PayPal.

Be sure to have your Bank name, IFSC code, and Account number ready and on hand.

How to confirm bank account in PayPal

For both individual and business accounts with PayPal, you will need to verify and confirm your linked bank account through a similar process.

To do this, PayPal will send two small deposits, with amounts between ₹1.01-1.50, to the bank account you have submitted. You can check your bank account or bank communication for the exact amounts that have been deposited. This can take 4-5 business days.

Once you have the unique amounts that were deposited in your account, you can confirm your bank account by entering in the amounts under the Payments Method tab. If the amounts match, your bank account is confirmed.⁶

PayPal can feel confusing at times with what you can and can’t do. So let's recap a few important questions.

What do you need to open a PayPal account?

To open a personal PayPal account in India, you will need a valid phone number and email address.

Next, to make purchases, you will need to link a debit or credit card, or a bank account to your PayPal account. And make sure your bank account allows for international transactions.

For a business account, you will need to have a valid and registered business and a PAN number to open an account.

You will also need a business bank account that matches your PAN information. Besides these items, you may need to show additional documentation validating your business and line of work.

Is a PayPal account free?

It is free to open and have a PayPal account. But there are fees when you are using your PayPal account for transactions, especially for businesses.

First, you will be paying PayPal’s exchange rate on any international transactions.

PayPal has an exchange rate that is different from the mid-market exchange rate, and in that difference they are able to sneak in a fee. Even for individuals who are shopping online.

But if you are business, you will be paying additional fees for domestic and international transactions.⁷

Standard India- Domestic3% + ₹3
Domestic Debit card through RuPay, UPI, BHIM-UPI, or UPI QR Code2.5% +₹3
International Transactions4.4% + fixed fee

The fixed fee for international transactions depends on the currency the payment is coming from. See below for what the fixed fee can look like:

Currency Home CountryFixed Fee
Australia.30 AUD
Euro.35 Euro
US dollar.30 USD
United Kingdom.20 GBP

And in addition, you will be paying a currency conversion fee over and above the exchange rate.

⚠️ Currency Conversion Fee: 3% on top of the exchange rate

Before making a payment, be sure to check the PayPal fees calculator to know exactly how much you will end up paying. Or use the compare tool to know all your options.

The true cost of sending USD to INR

PayPal can feel expensive and take a real bite out of payments from international customers. Make sure you do your research on online global payment providers that could give you a better deal on international payments.

Is it safe to open a PayPal account?

PayPal is absolutely safe to open. As one of the oldest running global payment platforms, PayPal offers 24/7 online fraud monitoring and selling protection, and 180 day buyer protection for refunds. Many well known global brands use PayPal as a payment gateway.

PayPal has a robust customer service with a resolution center, community support and customised help for any issues with your account.⁸

Receive payments in India easily with Wise 🚀

Wise offers Indian businesses and freelancers with account details in 8 different currencies to receive payments from abroad. Your clients pay you with a local transfer in their currency, and you receive rupees in your INR bank account — with eFIRC for every transfer.

Get started with a Wise Business Account, and save with a low-cost transfer fee and mid-market exchange rate - which is the same as the one you see on Google.

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Get started with a Wise Business Account 🚀

Open your Wise Business Account

  1. PayPal India
  2. Signing up for an individual account
  3. Signing up for a business account
  4. Verifying an individual account
  5. Verifying a business account
  6. Confirming your bank account
  7. Merchant Fees International Transactions
  8. Safety of Paypal

Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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