How to Open a PayPal Business Account in India

The PayPal Business Account is one of the most convenient ways businesses in India can send and receive payments. 

It’s convenient, reliable, and quick. Best of all, you only need a few things to get started. To help you through the process, this article will walk you through every step you need to make a business account in India.

Introduction to PayPal Business Accounts

A PayPal business account is a financial technology solution for businesses to send and receive payments internationally through online payment gateways. 

Unlike a typical individual PayPal account, this type comes with features and services that make it easier to transact with your customers worldwide. Features such as invoicing, payment processing, and integration with e-commerce platforms make business a breeze.

But why open a PayPal business account, anyway? 

There are multiple benefits to this move:

• Convenient payment processing options: A business account lets you accept payments from customers using various methods. Take payment through credit cards, debit cards, and PayPal balances and make it easier for your customers to buy.
  
• Straightforward invoicing: You can create and send invoices directly through PayPal This makes it super easy to manage billing and track payments from customers.
  
• PayPal has a global reach: PayPal supports transactions in multiple currencies and languages. This lets your business sell to customers worldwide.
  
• Free to create, maintain, and use: A business account is completely free. All you need is some basic information, and then you can get paid internationally like a much larger business.
  
• It has a strong brand: Being a PayPal owner enhances your credibility and professionalism. PayPal is familiar and trusted, and your customers will buy from you with full confidence.

PayPal for business is one of the best ways to make your products and services more available to your consumers internationally. Not using a PayPal account runs the risk of being left behind by those who do, as customers will naturally gravitate towards the easiest payment options.

However, it is important to note that PayPal only supports international payments for Indian users starting April 2021.

Eligibility and Requirements for Paypal Business Account – India

A PayPal business account lets you process international payments.

For your security, there are robust eligibility criteria and business requirements you need to submit, to prove you’re a legitimate business. Once you’ve prepared these requirements, registration will be smooth.

But what do you need to sign up for a PayPal business account? This section will provide you with a checklist of everything you need to know and have.

Eligibility criteria for opening a PayPal Business Account in India

If you want to use the business tools that this type of account will give you, you need to prove you’re a legitimate business.

For that, you need to pass strict eligibility criteria, such as the following:

• You must be a legal business entity. Your business must operate as a registered business entity in India, including sole proprietorships, partnerships, private limited companies, etc.
  
• You need to have a valid bank account. Have a valid bank account in India linked to your business entity for sending and receiving funds through PayPal.
  
• You must comply with PayPal Policies. Ensure your compliance with PayPal’s acceptable use policy and other terms and conditions. This includes regulations related to prohibited items and restricted activities.

You need to pass all eligibility criteria before you can proceed. Fortunately, eligibility is relatively easy to acquire. If you are a business already, then these criteria shouldn’t be a problem for you.

Required documents and information for the account registration process

Now that you’re eligible, you still need valid documentary requirements to open an account. 

Have these documents and information ready when setting up your account so you can register without hassle:

• Valid Permanent Account Number: Your PAN is a unique 10-digit alphanumeric code issued by the Income Tax Department of India for tracking financial transactions.
  
• Purpose Code: This is the code assigned to transactions to indicate the nature of the transaction, especially for international payments. You’ll find a list of this when you register for a PayPal account.
  
• Local bank account: You need to link your local bank account details for payment processing. This is where your small business will deposit money from customers.
  
• Additional business information: Depending on your business type, you may be asked for additional information. This can include product or service keywords, monthly sales, website, and employer identification number.

Providing the necessary documentary requirements will let you successfully open a PayPal business account in India.

Understanding the verification process and additional requirements

The registration is not the end. Even if you pass the eligibility criteria and submit the required documents/information, you will then need to verify your account as the final requirement.

This comprises several steps, which are the following:

1. Confirm your email address. After signing up for an account, you will receive an email in your inbox. Click on the email to confirm that PayPal has your correct email address.
   
2. Verify your identity. Complete a KYC (Know Your Customer) Procedure to verify your identity. This will protect your account from risks like identity theft, money laundering, and financial fraud. The KYC Procedure may vary based on your region or type of business.
   
3. Add a bank account. Link your PayPal Business account with a valid bank account by providing details like your Bank Name, IFSC Code, and ensuring that the name matches the name on your PAN Card.
   
4. Verify your bank account. After adding your bank account, PayPal will make two deposits into your bank account over 4-5 days (usually about ₹1.01-1.50).. Log in to your PayPal Business Account, enter the amounts deposited, and click “Confirm” to verify your bank account. Once verified, you can start receiving payments.

This process ensures that your PayPal business account is activated securely. This will let you conduct business transactions smoothly and risk-free.

Step-by-step guide to creating a PayPal Business Account in India

In this section, we’re going to lay out the exact steps you can expect to take when creating a PayPal business account. 

This is helpful for giving you an idea of the process that you need to undergo:

1. Visit the PayPal website and click on “Sign up.”
2. Enter your name, address, email address, and business customer service contact information.
3. Submit the form to create your account.
4. After signing up, check your email for a confirmation message from PayPal.
5. Click on the email to confirm your email address.
6. Then, go through the verification process as detailed above.
7. Once verified, log into your PayPal account to complete the setup.
8. Choose your preferred business payment method and set up additional business features.

These are the steps to making a business account for your new business. The entire registration process takes no more than minutes. But for your security, the verification process will usually take 4 to 5 business days.

Customizing Your PayPal Business Account

Once you have your account set up and verified, you can begin customizing it.

Customization gives you more professionalism and gives your customers more confidence in your brand when choosing payment options.

You can customize the checkout page with your business logo and colors for a professional appearance. Additionally, create personalized payment buttons that match your branding, custom payment pages, display customer support information, etc.

Tinkering with your PayPal account isn’t just an aesthetic decision as well, you can enable features that make it easier for your customers to transact with you.

For example, you can make the PayPal account optional at checkout to streamline payment. You can enable auto return features, collect contact telephone numbers when they pay, and implement additional security features for online payment.

Understanding Fees and Charges

Registering and verifying an account is free, but there are PayPal business account fees. They tend to be highly affordable compared to alternatives, though.

For a PayPal business account in India, the fees are as follows:

• International transactions: The fee structure includes a percentage of the transaction amount (4.4% fixed fee) along with a fixed fee in the respective currency. For example, transactions in US dollars (USD) incur a fee of 0.30 USD.
  
• International micropayments: Micropayments incur a 6.00% transaction fee, plus a specific fee for the respective currency.
  
• Dispute fees: PayPal may charge a dispute fee when a dispute claim or chargeback is filed. The fee is charged on and varies according to the original currency of the transaction.
  
• Currency conversion: When you convert the balance and payment you received to another currency, PayPal charges 3.0% over the base exchange rate. There are also currencies with 4.0% over the base rate.
  
• Withdrawal to a bank account: Withdrawing money from PayPal to your bank account is free.

You can also structure alternative payment methods for your PayPal business account. For this, you’ll have to conform to PayPal’s APM Agreement and will be charged according to commercial transaction rates.

The table for specific currency fees can be found on PayPal’s merchant fees page.

Integrating PayPal with Your Ecommerce Website

One of the best things about a business account is that you can integrate it into your e-commerce website seamlessly.

Once you’ve secured your PayPal business login, access the payment settings or integrations section of your e-commerce platform dashboard. Then look for PayPal as a payment gateway option and enable it.

Follow the prompts to connect your business account to your website. You may need to provide your PayPal merchant account credentials or API credentials for authentication.

You can then modify the payment settings depending on your need, such as enabling PayPal Express Checkout, PayPal Standard, or PayPal Payments Pro.

Managing Transactions and Withdrawals

One of PayPal’s best features is its ease of use. You can easily move your money around, from your account to your bank, and vice versa. This will help you manage your business better.

To make withdrawals and transactions in PayPal, follow these general steps:

• To withdraw money to your bank account: Log in to your PayPal account and go to the “Wallet” section. Click on “Transfer Money” and then select “Transfer to your bank account.” Follow the prompts provided.
  
• Withdraw money using a PayPal debit card: If you have a PayPal debit card, you can withdraw money from ATMs. The PayPal Debit Card allows you to withdraw up to a certain limit daily.
  
• Transact through PayPal: When making a purchase or payment, select PayPal as the payment method and log in to your account to complete the transaction securely.

By following these steps, you can efficiently withdraw money to your bank account and make transactions using your PayPal account. 

Final Thoughts

A PayPal business account is one of the best business tools that you can use for international payments in India.

With this, you can easily sell your products to an international audience. Your business won’t be limited to a very narrow geographical area and grow to your highest potential.

Refer to this article when you’re ready to implement a PayPal business account for your international business.