How to use PayPal account in India

Aman Saxena

You may have heard about PayPal in India, but might be asking yourself, how does it actually work?

That is a good question, because it does work differently domestically, and also differs for personal use versus businesses in India.

Let’s break down how you can use PayPal in India.

⚠️ PayPal India has stopped their domestic payment transaction operations and will only be providing businesses for cross border transactions. Individual use of PayPal or selling domestically will be closed to focus on providing products for Indian businesses to sell internationally.

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📝 Table of contents

How to open a PayPal account

So let’s get started on how to open a PayPal account in India. Whether 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.

Here is a step by step guide on how to open a PayPal account¹:

  1. On the PayPal website, click on the Sign Up button in the top right corner
  2. Choose between opening an Individual Account or a Business Account, per your needs
What you can do ✅What you can’t do ❌
Individual AccountShop 24/7 through PayPal• Send or receive money personally

• Fill up a wallet

Business AccountReceive payments from customers or sellers or businesses globally

• Send and receive international payments

Can’t maintain a loaded PayPal wallet

After choosing to open an Individual Account:

  1. Click on Next
  2. Confirm your India-based mobile number
  3. Follow the steps to open your account

After choosing to open a Business Account:

  1. Click on Next
  2. From the dropdown, choose how you are looking to accept payments and describe your annual sales volume. PayPal will suggest the best way for you to receive that is appropriate for your business.
  3. Click on Next to continue
  4. Provide the email address you would like affiliated to the account. Be sure to check that email’s inbox for an email from PayPal to confirm with the link provided.
  5. Next, you will be asked to tell PayPal about your business, including your business’ PAN details:

  1. Continue to follow the steps and complete the KYC questions to open your account. Make sure that your business bank account has the same PAN number as the one you are using to open your PayPal account.
⚠️ To begin using your account to make payments to sellers or suppliers, or to receive money from customers, make sure you link your debit or credit card or bank account to your PayPal account.

For individuals, you can link your debit or credit card by going to Payment Methods and then Link Debit or Credit Card.

For businesses, you will have to go to Payment Methods too and then link your bank account.

Last but not least, the most important part to finish opening your PayPal account is to verify your card or bank account.

For individuals, you will receive a OTP confirmation on the mobile number associated 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 happen. Once the amounts are deposited, you will have to enter in the exact amounts to verify your account in PayPal.

How to use PayPal to receive money

To receive money in your PayPal business account, first make sure your account is open and verified.

Next, you can look at the different PayPal payment solutions that are appropriate for your business to receive funds from international customers²:

  1. Website Payments
  2. PayPal Checkout
  3. Online invoicing
  4. links
  5. Email Payments

As a seller, you can also use the Request Payment feature on PayPal to get payments by using the clients’ email address.

If you are trying to receive money in a personal PayPal account, you are out of luck here.

Try other providers to receive money from abroad to your local bank account, like Wise 🚀

The true cost of sending USD to INR

You can also read how to receive money with PayPal to know more.

How to use PayPal to pay someone

Unfortunately, if you are using PayPal as an individual in India, you will not be able to send money to friends, family or clients. The PayPal wallet feature is not available in India for personal use.

However, as an individual, you can use PayPal to make a purchase with the sellers that use PayPal globally and through the PayPal mall for goods or services.

To make a purchase to a seller or merchant on PayPal, you will first have to link your PayPal account with your debit or credit card, or your bank account. PayPal does not let you fill a digital wallet with their system in India.

You can link your debit or credit card by going to the Payment Method on your dashboard, once you are signed for PayPal. Then click on Link Debit or Credit Card, and input your card details.

You will have to verify your card information to proceed.

If you are a registered business, it is possible and easier to send payments. There are two ways you can pay someone on PayPal³:

  1. You can use the Send button in the PayPal app and use the person’s name, phone number or email address to send the amount
  2. You can go to Send and Request on the PayPal website and click on Pay for goods and services.
  3. You can send money abroad under Send and Request tab on the dashboard

Do I need a bank account for PayPal?

You don’t need a bank account for PayPal as an individual making purchases. You will just need a valid debit or credit card.

If you are a business, you will need a bank account to use your PayPal business account. PayPal requires a daily withdrawal from your PayPal balance into your bank account, so it must be connected for you to operate.

How can I use PayPal without a card?

You can use PayPal without a card by linking your Indian bank account to your account. You can do this under the Payments Method tab on your dashboard.

For businesses, payments can then be made to your PayPal account, which will be withdrawn to your local bank account daily. And you can also link your bank account to make payments through PayPal to clients or suppliers abroad.

Is there a fee to use PayPal?

PayPal is free to open and maintain, no matter what kind of account you have.

But the fees are made up for through your activity in your account.

Customers and personal users will not have to pay any fees, but if you are a business you will have to bore the charges.

Here are the major fees for businesses in India operating on PayPal⁴:

Exchange Rate

PayPal sets their own exchange rate, which means you may be paying a marked up rate on any international transactions that come in. The rate you get from PayPal will likely be different from the mid-market rate. The mid-market rate is the rate that banks use themselves and is the one you see on Google.

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.

International Transaction Fee

For every international transaction there is an international transaction fee of 4.4% + a fixed fee depending on the currency of the funds that are coming in.

Domestic Transaction Fee

For payments done in India, there is a standard domestic fee of 3% + ₹3 on every transaction.

If your customer uses UPI or BHIM for their payment, the transaction fee is 2.5% + ₹3.

Currency Conversion Fee

There is a currency conversion fee of 3% on top of the exchange rate anytime you are converting a paid amount you received into INR. Now with how PayPal operates in India, that means you have to pay the currency conversion fee daily when the funds are withdrawn to your account.

For a more detailed breakdown, head to the PayPal fees article.

Doing business overseas and need to receive international business payments? Wise could save you money. 🚀


Wise makes it simple and easy for you to receive money in your local bank account in India. 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.

Open your Wise Business Account

  1. Opening a PayPal Account
  2. Receiving Money with PayPal
  3. Sending Payments with PayPal
  4. Fees with PayPal

All sources checked as of 9th February, 2021

*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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