How to Create Paypal Account in India, PayPal, a prominent player in global money transfers and digital wallets, extends its services to residents of India. However, there are specific nuances to understand before signing up for PayPal in India, as its operations differ domestically.
To grasp the uniqueness of PayPal’s functioning in India, let’s delve into how it operates and how you can create an account.
Are you launching a new venture or already managing a thriving small to medium-sized business (SMB)? Consider establishing a PayPal business account. These accounts cater to those seeking to start accepting payments or expand payment options, facilitating the management of daily online sales. Even if you possess a personal PayPal account, there are advantages to opening a distinct business account.
With just a few details about yourself and your business, follow these nine straightforward steps, and you’ll swiftly establish a PayPal business account. Within minutes, you’ll be equipped to accept payments for goods and services, monitor payments and profits, and leverage features like live customer support.
Sending money to India need not be a complex or costly endeavor.
What is PayPal: Your Gateway to Global Online Transactions
PayPal serves as the trusted online payment gateway for sending and receiving money worldwide in a secure manner. Take a look at the image below for a clearer depiction.
Let’s illustrate with an example:
Imagine you operate a blog and engage in promoting affiliate products. When a customer purchases a product through your affiliate link, you earn a commission. For instance, the Bluehost web hosting company offers an Affiliate program with a $65 commission per sale. If you make 5 sales in a month, your total commission would be $325.
Now, how do you receive this commission in your Indian bank account? This is where PayPal steps in.
First, the company (like Bluehost) transfers the commission amount to your PayPal account, which is linked to your bank account. From there, you can easily transfer the $325 to your bank account in India. It’s a straightforward process to convert and transfer money from various currencies to your Indian bank account with PayPal’s assistance.
Having utilized PayPal for my affiliate commissions over the past 4 years, I can attest to its status as one of the most reliable payment systems, offering a secure and seamless experience.
Next, let’s delve into the process of creating a PayPal account.
How PayPal’s Operations in India
PayPal’s operations in India cater to both individuals and businesses, but with certain limitations in functionality.
For individuals, PayPal serves primarily as a platform for shopping at select brands and boutiques featured on the PayPal Shopping home site. Notably, PayPal India does not facilitate overseas money transfers or maintain a wallet feature. Instead, individuals must link their debit or credit cards to their accounts to make payments for purchases from sellers on PayPal.
However, for business owners, PayPal offers more extensive capabilities. Businesses can receive international payments from 200 countries and also utilize PayPal for domestic transactions, albeit potentially at a higher cost compared to native-Indian payment gateways.
With a registered business account, users can both receive and send payments using PayPal India. It’s essential for business account holders to monitor associated fees, as international payments incur a fee of 4.4% plus a fixed currency fee, along with additional charges for currency conversion and PayPal’s exchange rate markup.
It’s crucial to note that PayPal’s exchange rate differs from the mid-market exchange rate used by banks and displayed on platforms like Google. Any variance from the mid-market rate may indicate a markup on the exchange rate.
Furthermore, with a PayPal India business account, account balances are cleared daily into the user’s local bank account.
| Category | The Good | The Bad |
| Individuals | Shop using PayPal | – Cannot send or receive personal payments – No option for a PayPal Wallet |
| Businesses | Receive or send payments | Restricted from maintaining a PayPal balance for more than 24 hours |
Why You Should Have a PayPal Account
Whether you’re a blogger, freelancer, or online entrepreneur, having a PayPal account is essential for seamless online transactions, both domestically and internationally.
Here’s why:
- Convenience: PayPal simplifies the payment process by eliminating the need to share your account numbers or card details every time you make a purchase. By linking your debit/credit card or bank account to your PayPal account, you can swiftly complete transactions with just a few clicks.
- Safety: With PayPal, your financial information remains secure. You can shop confidently, knowing that your sensitive details are not exposed to multiple vendors. PayPal’s advanced security measures ensure peace of mind for both buyers and sellers.
- Global Reach: Accepting PayPal on your website can attract a wider audience from different parts of the world. Buyers appreciate the convenience and security offered by PayPal, making them more likely to complete purchases on your platform.
Having a PayPal account can open up new opportunities for your business while providing a secure and hassle-free payment experience. Don’t wait any longer……..Create your PayPal account today and take your business to the next level.
Essential Requirements for Setting Up a PayPal Business Account
Prior to accessing PayPal, ensure you have the following documents ready for a swift and seamless account setup:
- Name and address details of the PayPal account owner, usually the business proprietor.
- Valid email address of the account owner for verification purposes.
- Name and address information of the business entity.
- Contact details for the business’s customer service.
- Bank name where transactions will be processed.
- Bank account number for linking transactions.
- Bank routing number to facilitate transfers.
Step-by-Step Guide to Creating a PayPal Account in India
Creating a PayPal account in India is a straightforward process and comes at no cost. Simply follow the steps outlined below:
Step 1: Access the PayPal Website
Open your PC browser and navigate to the official PayPal site by clicking on this link. Upon reaching the site, locate and click on the “Sign-Up” button.
Step 2: Select and Set Up Your PayPal Account Type
Upon reaching the account page, you’ll encounter two options provided by PayPal:
- Individual Account: If you’re an individual earning income through activities such as blogging, YouTubing, or freelance work, opt for the “Individual Account.”
- Business Account: Alternatively, if you operate a business with partners and engage in frequent transactions, select the “Business Account.”
Once you’ve chosen the appropriate account type, proceed by clicking the “Next” button to continue with the setup process. Remember, if you initially create a Business Account but later wish to switch to an Individual Account or vice versa, you can easily do so by reaching out to PayPal customer service for assistance.
Step 3: Provide Account Information
Once you’ve selected your desired account type, input your primary mobile number and complete the OTP verification process.
Next, enter your email address and create a password for your account. Ensure that you enter the correct email address and confirm your password. Click on the “Next” button to proceed.
Step 4: Input Basic Information
Now, proceed to enter essential details to set up your account, including your nationality, address, city, state, and mobile number.
It’s crucial to ensure that your “First Name” and “Last Name” match the information on your bank account precisely. Enter these details accurately as per your proof documents.
Once you’ve provided all necessary information, review the PayPal agreement and privacy statement policy, then click on “Agree and Create Account” to proceed.
Step 5: Link a Card
In this concluding step, if you opt to link your debit or credit card, provide the following information: “Card Number,” “Card Type,” “Expiry date,” and “Security Code” (CVV). Once you’ve entered these details, click the “Link Card” button.
Linking your card facilitates purchases from various platforms like Amazon, Alibaba, and more. However, if you prefer not to link your card at this time, you can skip this step and proceed directly to your account page.
Nevertheless, linking your card can streamline the process of connecting your bank account to PayPal in the future.
Step 6: Creating a PayPal Account in India
Congratulations! Your PayPal account has been successfully created. Upon completion, you’ll be presented with an account summary, as depicted in the image below.
It’s important to note that verifying your mobile number and email address is mandatory for account verification purposes.
To enable receipt of payments from PayPal to your bank account, three essential steps are required:
- Verify your email address.
- Add your bank account.
- Complete KYC (Know Your Customer) details.
With these steps completed, your PayPal account is ready for secure and convenient online transactions.
Step 7: Adding Bank Details
Now that your PayPal account is created, it’s time to connect your bank account for sending and receiving money.
Remember, it’s crucial that the name on your bank account matches the name on your PayPal account for successful transactions.
Enter your bank details, including the IFSC code and account number, and submit them. PayPal typically takes a couple of days to verify your account.
After submitting your bank details, PayPal will initiate two small deposits into your bank account. These deposits serve as confirmation, and once you verify the amounts, your bank account will be successfully linked to your PayPal account.
With this step completed, you have successfully created and linked your bank account to your PayPal account in India.
What is PayPal Account Fees
Yes, opening and maintaining a PayPal account is free. However, fees are incurred when using the account for transactions, particularly for businesses.
Here’s a breakdown of PayPal’s fees:
- Exchange Rate Fees: For international transactions, PayPal applies its own exchange rate, which differs from the mid-market rate. This variance includes a fee, even for individual online shoppers.
- Transaction Fees for Businesses:
- Standard India-Domestic Transactions: 3% + ₹3
- Domestic Debit Card Transactions through RuPay, UPI, BHIM-UPI, or UPI QR Code: 2.5% + ₹3
- International Transactions: 4.4% + fixed fee
- The fixed fee varies based on the currency of the payment origin. Examples include:
- Australia: 0.30 AUD
- Euro: 0.35 Euro
- US Dollar: 0.30 USD
- United Kingdom: 0.20 GBP
- The fixed fee varies based on the currency of the payment origin. Examples include:
- Currency Conversion Fee: In addition to the exchange rate, PayPal charges a currency conversion fee of 3%.
It’s essential for businesses to be aware of these fees when using PayPal for transactions.
Cost of Opening a PayPal Business Account
Opening a PayPal business account comes at no cost. There are no setup fees involved, and you won’t encounter any monthly fees when using PayPal Payments Standard (although PayPal Payments Pro does charge a $30 monthly fee). Additionally, there are no minimum processing requirements, and you have the flexibility to cancel your account at any time.
Although there is no fee to establish your PayPal business account, it’s important to note that there are associated fees for utilizing PayPal’s payment processing services. These fees apply to various transactions, including credit and debit card payments, as well as international payments for goods and services.
How Indian Debit/Credit Cards Function in Online Payments
In India, there are four types of cards commonly used for online transactions: VISA card, VISA Electron, MasterCard, and Maestro.
According to regulations, all domestic online transactions made using debit or credit cards must undergo a 2-factor authentication method, which is mandatory.
The first layer of security involves entering card details such as the card number, expiry month and date, name on the card, and CVV (Card Verification Value). The second layer of security requires authorization via either 3DSecureCode or Verified by Visa.
To comply with the second layer of security, cardholders need to register their cards on their bank’s portal and create a password. For VISA cards, this password is referred to as Verified by Visa or VbV, while for MasterCard, it’s known as 3DSecureCode.
Following these guidelines, all Indian cards, especially debit cards, are designed to work exclusively with websites that offer the 2-factor authentication process for online transactions within the country.
Types of Indian Debit Cards Accepted by PayPal
PayPal accepts credit cards seamlessly for account linkage, but encountering issues with linking debit cards is common.
Only Indian debit cards enabled for international usage are accepted by PayPal.
Notably, international payment functionality is not inherent to all Indian debit cards, including those labeled as ‘International debit cards.’
While International debit cards can be utilized at ATMs and Point of Sale terminals overseas, they may not support international payments domestically unless specifically activated.
To successfully link a debit card to your PayPal account, it must allow for international payments. Otherwise, attempts to link the card will be unsuccessful.
Reasons for Denial of Indian Debit Cards in International Payments
The denial of Indian debit cards for international payments primarily stems from guidelines set by the Reserve Bank of India (RBI) governing online payment mechanisms. While aimed at bolstering security in electronic payment systems amidst cyber threats, these guidelines often inconvenience users seeking to use debit cards for international transactions.
One of the main factors is the requirement for a 2-factor authentication method, which applies to transactions within India and specific countries.
Many international merchants, such as iTunes, Google Play Store, or eBay, particularly those based in the United States, do not utilize Verified by Visa (VbV) or 3DSecureCode to authenticate online transactions.
When attempting to make purchases from these international stores using an Indian debit card, the bank’s payment gateway searches for VbV or 3DSecureCode in the background. However, since these international payment gateways do not employ the second layer of security, the transaction fails.
Indian debit cards are typically designed for payment gateways that utilize the 2-factor authentication method, hence the compatibility issue.
In contrast, credit cards are more versatile and function seamlessly across all payment platforms, both domestically and internationally.
Solution for Using Indian Debit Cards in International Payments
To address the challenges faced with Indian debit cards in international payments, ensure that your debit card is enabled for international usage.
Certain banks recognize the increasing demand for international card usage and provide customers with debit cards already enabled for international payments. Some of these banks include:
- HDFC Bank (Platinum Chip Debit Card)
- ICICI Bank
- AXIS Bank (Chip Card)
- Indian Bank (EMV MasterCard World)
- Standard Chartered Bank
- Kotak Mahindra Bank (Gold Chip Debit Card)
- CITI Bank
If your debit card is not listed, there’s still a solution. As per an RBI circular, debit cards are by default payable only in India, Nepal, and Bhutan. However, cardholders can request separate activation for international usage.
Simply contact your bank’s customer care and inquire about enabling international usage for your debit card, specifically for platforms like PayPal. If your bank offers this provision, they can activate international usage from their end.
If your current bank does not support international usage, consider obtaining a credit card or opening an account with one of the mentioned banks to acquire an appropriate debit card.
It’s important to note that all debit cards enabled for international usage must be equipped with EMV Chip and Pin technology, as mandated by RBI guidelines. EMV Chip and Pin enhance security for card transactions globally.
A Secure Solution for PayPal Account Verification and Online Payments
Virtual Credit Cards (VCCs) offer a secure and convenient alternative to traditional credit and debit cards for PayPal verification and online payments.
With VCCs, you can avoid exposing your actual card details, minimizing the risk of fraud significantly.
Numerous banks, wallet-based applications, and non-bank websites provide virtual cards for free, making the process simple and straightforward.
Some of the banks offering Free Virtual Credit Cards include State Bank of India, HDFC, Axis, and Kotak Mahindra. Additionally, popular options such as Lime wallet by Axis, Pockets by ICICI, Entropay, Oxigen Wallet, and FreeCharge Go are available.
Entropay Virtual Cards, for instance, enable PayPal account verification and online payments on various international websites. Simply fund the Entropay Virtual Card by transferring funds from your personal credit or debit card.
Similarly, virtual cards offered by banks like HDFC, Axis, and Kotak Mahindra can be used for online payments and PayPal verification. However, State Bank Virtual Card is only compatible with Indian merchant websites, while Lime wallet and Pockets app do not support international payments at this time.
Creating a Free Virtual Credit Card in India is straightforward. With your debit card, PAN, bank account, and active email ID ready, the PayPal account sign-up process can be completed within minutes.
Also Read How to Create Digilocker Account
Benefits of Using a PayPal Business Account
Here’s a quick overview of the advantages offered by PayPal business accounts:
- Easy Account Setup: Setting up a PayPal business account is a straightforward process.
- Enhanced Privacy: PayPal business accounts provide greater privacy compared to personal accounts, as they can be registered under a company or business name.
- Accept Credit/Debit Card Payments: Business account users can collect payments via credit or debit card from customers who do not have a PayPal account.
- Multi-User Access: Up to 200 employees can access the account, with customizable levels of access determined by the account owner.
- Live Customer Support: Business account users receive support from PayPal’s live customer service team.
- Access to Business Tools: Users gain access to PayPal’s suite of business tools and products designed to streamline transactions and enhance business operations.
If your business is experiencing significant growth, opening a PayPal business account can provide numerous benefits and support your evolving needs.
PayPal India Rules & Regulations
Here are the rules and regulations set by PayPal for users in India:
- Transaction Limit: The value of a product or service cannot exceed USD 10,000 per transaction.
- Transfer Timeframe: Balance transfers into your bank account must occur immediately upon receipt of the buyer’s confirmation and no later than 7 days after PayPal transfers funds to the authorized dealer bank.
- Facilitator Role: PayPal serves solely as a facilitator of online payments and does not function as a repository or custodian of buyer charges.
- Usage Restrictions: PayPal balances cannot be used for purposes such as domestic money transfers or local online shopping. It is exclusively reserved for cross-border online financial transactions.
- Payment Methods: Only debit cards or credit cards are acceptable for payments. No other means of payment are permitted.
- PAN Requirement: Providing a PAN (Permanent Account Number) is mandatory for PayPal users in India.
How to Get Verified on PayPal
To become verified on PayPal, you need to complete your user profile by providing all necessary information to confirm your identity. This includes adding your bank account and debit or credit cards to your profile, as well as providing PAN details accurately. Once these tasks are completed, PayPal removes withdrawal and payment limits, allowing you to receive payments without restrictions.
As a verified PayPal user, your status is valued by buyers and sellers because it signifies that you have passed PayPal’s security checks.
To initiate the verification process, simply log in to your PayPal account and follow the steps provided on the profile summary page.
FAQ’S for How to Create Paypal Account in India
What are virtual credit cards (VCCs) and how do they work?
Virtual Credit Cards (VCCs) are digital cards that can be used for online transactions without revealing your actual credit or debit card details. They work similarly to physical cards but are only usable for online purchases.
Why are VCCs considered a secure solution for PayPal account verification and online payments?
VCCs offer enhanced security because they allow you to make transactions without exposing your actual card details. This minimizes the risk of fraud and unauthorized transactions.
Which banks and platforms offer free virtual credit cards in India?
Several banks, wallet-based applications, and non-bank websites in India offer free virtual credit cards. Some of the popular options include State Bank of India, HDFC, Axis, Kotak Mahindra, Lime wallet by Axis, Pockets by ICICI, Entropay, Oxigen Wallet, and FreeCharge Go.
Can virtual credit cards be used for international payments and PayPal verification?
Yes, certain virtual credit cards, such as Entropay, can be used for international payments and PayPal verification. However, it's essential to check the compatibility of the virtual card with international merchants and payment gateways before use.
How can I create a free virtual credit card in India for PayPal verification and online payments?
To create a free virtual credit card in India, you typically need to have a debit card, PAN (Permanent Account Number), active bank account, and email ID. The process varies depending on the issuing bank or platform but generally involves signing up for a virtual card and linking it to your existing accounts for funding.
Norah Castaneda