Paypal to sell online in India

Everything You Need To Know About Using Paypal To Sell Online In India

Disclaimer: The information provided is based upon what is mentioned on PayPal website, is correct at the time of this blog post and may change in the future.

PayPal is the best payment solution when you want to sell goods and services overseas. It is the most trusted global service to send and receive payments.

PayPal has made global selling easy for merchants in India. Those willing to expand their business across different countries can use this fast, easy and safe payment solution.

You can add PayPal button to your site and start accepting payments in different currencies. It comes pre-integrated with e-commerce solutions like Shopify, Magento, OS Commerce.

You can easily use PayPal to sell online in India. To see how Paypal works, visit their demo site.

IMPORTANT UPDATE ( 8 November’17):

 PayPal today announced the launch of its domestic operations in India. Indian consumers can use PayPal to shop online at select websites like Pepperfry, Makemytrip etc..

It’s just a beginning as more sites are going to use Paypal. This is a good news for online merchants as they can use Paypal to accept payments  from Indian shoppers as well.

Benefits of using PayPal

  • Instead of restricting yourself to the local market, you get access to over 179 million global customers who use PayPal. In Asia Pacific alone, 10.7 million buyers are using Paypal.
  • PayPal is an internationally recognized payment gateway. When you are working with the best, customers feel confident to purchase.
  • As PayPal offers different payment options, chances of successful transactions increase a lot.
  • You don’t have to wait for the payment for days. PayPal transfers funds to your account daily.
  • PayPal has a seller protection policy for selling physical and non-physical goods (excluding digital goods) to protect you from fraudulent transactions.

Before you start using PayPal targeting global customers, you ought to know about legal requirements and restrictions.

So, read these points carefully before using PayPal to sell online in India:

RBI regulations

As per RBI guidelines, you need to link your bank account to your PayPal account to receive cross border payments.

Sellers can’t receive payment of more than  $10,000 per transaction for goods and services sold by them.

To start accepting overseas payments, you need to have a business account. You will be required to:

  1. Enter your PAN card details and email address. PayPal verifies your PAN details instantly. Remember, your name on PAN card should be the same as entered on PayPal account.
  2. Add your local bank account and purpose code for your business.

What is purpose code?

Purpose code is the nature of your business  transactions. It’s mandatory to select a purpose code for your transactions to withdraw money from PayPal account to your bank account.

PayPal will give you different options to choose from, like:

Export of goods, software consulting, advertising and market research etc.

As an online merchant, you will select ‘export of goods’ as the purpose code.

About FIRC (Foreign Inward Remittance Certificate)

As a legal requirement, anyone who receives payment in foreign currency needs to get this document.  Many statutory authorities need this document as a proof that an individual or company has received payment in foreign currency.

FIRC is beneficial for freelancers as in India no service tax is levied on services exported from India. So those selling services from marketplaces like Fiverr can take advantage of this certificate as a proof of export of services.

FIRC contains the following information:

  • UTR (Unique Transaction Reference number)
  • Customer name
  • Account number
  • Amount of money
  • Date and purpose of payment

For every payment received from Paypal, FIRC is issued by Citibank that charges a fee of Rs. 171.75 per transfer. Merchants need to give a request letter for issuing FIRC to Citibank through their bank where PayPal payment is credited.

Citibank will send FIRC to the postal address mentioned in request letter in 7 working days.

See: Request letter Sample.

Receive payment via Email or online invoice

This is an awesome service especially helpful for those selling services and for freelancers. You don’t even need to have a website for that. When you want to send invoice via email, just fill the specified form and PayPal will send the invoice. Customers will also receive payment button alongwith invoice.

There are no charges for sending invoice. Once the payment is made, you are charged a fee (See the details of PayPal fees later in this article). There’s no monthly set up or cancellation fee.

Sell on eBay and Etsy

Sellers who want to expand their business globally can list their products on Etsy and apart from selling locally in India. Checkout with PayPal is enabled on these marketplaces.

PayPal Fees For Overseas Transactions:

(As mentioned on PayPal site on the date of writing this article. Please check for any updates)

Monthly sales volume upto $3000 USD

Website, Invoice and Email payments: 4.4% + $0.30 USD

eBay Payments: 3.9% + $0.30 USD

Monthly sales volume $ 3000.01 – $ 10,000 USD

Website, Invoice and email payments: 3.9% + $0.30 USD

eBay Payments: 3.4% + $0.30 USD

Monthly sales volume $ 10,000 USD – $ 100,000 USD

Website, Invoice and email payments: 3.7% + $0.30 USD

eBay Payments: 3.2% + $0.30 USD

Monthly sales volume: Above $ 100,000 USD

Website, Invoice and email payments: 3.4% + $0.30 USD

eBay Payments: 2.9% + $o.30 USD

About making payments online using PayPal in India

If you need to purchase goods or services using PayPal, you will have to link your credit/debit card to your PayPal account.
Sometimes, you may not be able to make payments with your linked debit/credit card.

You will get this message:

“You cannot complete this action on the card you have selected. Please select another card.”

 So, before linking the card, check if your bank accepts international payments using PayPal and also check about your spending limits.
You may need to enable international transactions on your card and

Following is the list of banks that accept debit and credit cards transactions using PayPal (As on the date of publishing this article. PayPal is negotiating with other banks for integration. Please recheck with PayPal if your bank has been added to the list):

Both Debit and Credit cards

Axis Bank
Indusind Bank
Kotak Mahindra Bank
Standard Chartered Bank
Federal Bank

Only Credit Cards

State Bank of India
Andhra Bank
Indian Bank
Jammu and Kashmir Bank
Vijaya Bank
Ratnakar Bank

Keep Your Account Secure

PayPal has clearly mentioned that they will never ask for the following information in email or SMS. So, be alert about phishing mails which ask for these details.

  1. Your full name
  2. Driving license no.
  3. Credit/debit card number
  4. Bank account no.
  5. email address
  6. Passwords


I hope this information will be helpful for those willing to use PayPal to sell online in India targeting international markets. I will try to update this post according to latest changes and updates in future.



Paypal to sell online in India