PayPal Business Account for Indian Exporters (2025): Features, Fees, and When to Switch to Skydo
TL;DR
- What it is: A PayPal Business account lets Indian exporters receive international payments with links, invoices, and checkout.
- Costs: ~4.4% + fixed fee per txn + 3–4% FX markup to INR; disputes/micropayments may add more.
- Best use: New/hesitant clients and low-ticket or one-off projects.
- Open it: Sign up for PayPal Business, complete KYC, link Indian bank a/c, select Purpose Code.
- Switch later: For repeat invoices $500–$20,000, consider Skydo (flat fees, live mid-market FX with zero markup, FIRA per payout, eBRC for Amazon sellers).
What is a PayPal Business Account (for Indian exporters)?
For Indian exporters, a PayPal Business account is a simple, trusted, and convenient way to get paid from clients in 200+ countries. You might have heard about a PayPal Individual account, which can be used for receiving personal remittances and shopping online.
A PayPal Business account is more tailored for commercial use as it offers invoicing, payment links, and business branding. But, since April 2021, it only supports receiving export payments; domestic INR transfers are not supported.
PayPal is also regulated by RBI as an Online Payment Gateway Service Provider (OPGSP) and recently got the in-principle approval to operate as a Payment Aggregator for Cross-Border Exports (PA-CB-E). PayPal Business is popular with Indian freelancers, agencies, SaaS platforms, and D2C exporters. Understanding its features, fees, and compliance will help you decide if it is the right choice for your emerging export business.
Key features (what exporters actually get)
This list will tell you about the features you will have access to when you open a PayPal Business account:
- Payment Links & Custom Invoicing: Create professional invoices with your brand name and logo. Include payment links or QR codes in your invoice with simple copy and paste.
- Website/App Checkout Integration: Integrate PayPal Business into your online store, like Shopify and WooCommerce, to accept online payments through cards, PayPal balance, Apple Pay, Google Pay, and more.
- Seller Protection & Dispute Management: PayPal’s seller protection protects your business from financial losses and helps you manage claims or disputes, so you can focus on growth with peace of mind.
- Recurring Payments: Automate subscription billing and recurring payments to save time and ensure you never miss out on repeat business.
- Business Reporting: Always stay on top of your cash flow and sales with clear, real-time reports from your dashboard.
Fees & FX: the real cost for Indian exporters
There are several components in the PayPal Business account fee structure. We have done a neat breakdown with an example, so you know exactly how much money you will be paying in fees for every foreign payment.
- Commercial Transaction Fee: PayPal charges 4.4% on the transaction amount for international payments. Which means, on a $1,000 payment, PayPal deducts $44 as the processing fee.
- Fixed Fee: In addition to the percentage fee, a fixed fee is charged depending on the currency received. For USD transactions, this fee is $0.30; for Euros, €0.35; and for British Pounds, £0.20.
- Currency Conversion Fee (Forex Markup): When converting foreign currencies to Indian Rupees, PayPal applies a markup of 3% to 4% above the base exchange rate. This means if the live exchange rate for 1 USD is ₹86, PayPal will offer ₹82–₹83 for 1 USD at the time of withdrawal.
- Micropayment Fees: For accounts approved to process smaller transactions (typically under $10), the fee is 6% + a small fixed fee (e.g., $0.05 for USD).
- Dispute Fees: If a buyer raises a dispute or chargeback, PayPal may charge a fee (such as $8), with a higher rate for accounts with a high volume of disputes.
Charge Category:
| Charge Category | Applicable Rate |
| Transaction Fee | 4.40% of the transaction amount |
| Fixed Fee | A fixed amount based on the currency received |
| Currency Conversion Fee (Forex Markup) | 3.0% to 4.0% above the base exchange rate |
| Dispute fees | $8 (for USD) |
Here’s an example to wrap up the calculation: Suppose you invoice a U.S. client $1,000 and the mid-market exchange rate is ₹86 per USD.
- Transaction fee: $44 (4.4% of $1,000)
- Fixed fee: $0.30
- Remaining balance before conversion: $955.70
- Suppose PayPal’s conversion rate is ₹82.50 per USD (after a 3%–4% markup): INR received = $955.70 × ₹82.50 = ₹78,845 If converted at the actual mid-market rate (₹86), the INR received would be ₹86,000. The difference of ₹7,155 accounts for fees and currency conversion.
Compliance & documentation (India-specific)
The section is divided into two parts: documents required to open a PayPal Business account in India, and how PayPal takes care of the compliance required for international payments.
List of documents to open a PayPal Business account
- Permanent Account Number (PAN): Provide a valid PAN to verify your identity. Individuals and sole proprietors can use their personal PAN. For other business types, a business PAN is required.
- Proof of Identity: Upload a valid identity document, such as your PAN card, as part of the KYC process.
- Proof of Residential Address: Submit proof of address from permitted documents during signup.
- Bank Account Information: Link an Indian bank account for withdrawals. Provide bank name, IFSC, and proof of ownership (like a bank statement or cancelled cheque). The account holder’s name must match the PAN.
- Business Details and Entity Proof: Specify your business type and industry. Provide business PAN and other related documents if applicable (e.g., business registration or address proof).
- Purpose Code: Select the correct Purpose Code (P-series) related to your export transaction when registering. For example, P0102 is the purpose code for export realisation.
- FATCA Declaration: Sign the US Foreign Account Tax Compliance Act (FATCA) declaration form. After you sign the form, PayPal checks if you’re a US taxpayer or not.
Key compliance obligation supported by PayPal
- Mandatory Withdrawal to INR: You cannot hold income in foreign currency in your PayPal Business account. The funds received are automatically converted to Indian Rupees and withdrawn to your linked Indian bank account.
- Foreign Inward Remittance Advice (FIRA): PayPal issues a monthly FIRA statement as proof of foreign currency receipt. It is also an essential document for export incentive claims and tax compliance.
- GST Compliance: Merchants registered under GST must provide valid GST numbers and verify GST invoices issued by PayPal.
How to open a PayPal Business Account (simple steps)
Follow this exact process to open a PayPal Business account stress-free:
- Initiate Sign Up: Visit PayPal’s website and choose to create a Business Account.
- Enter Business Details: Provide your business email, set a secure password, and enter your business name and industry.
- Provide Compliance Information: Submit your PAN details, ensuring the PAN name matches your PayPal account. Review and sign the FATCA declaration as required by PayPal’s US headquarters.
- Confirm Email: Verify your email address via the confirmation link sent to your inbox.
- Link Indian Bank Account: Enter your Indian bank details, such as bank name, IFSC code, and ensure the account name matches your PAN.
- Complete KYC: Upload required documents for KYC, such as proof of identity and address.
- Select Purpose Code: Choose the appropriate Purpose Code (P-series) representing the nature of your export transaction.
- Verify Bank Account: PayPal will deposit two small amounts into your bank account for verification. Enter these amounts on PayPal to complete the verification.
- Finalize Setup: After verification, log in to customize your payment preferences, currency settings, and other business features.
When a PayPal Business Account works well (use cases)
PayPal Business is a great fit, especially if you’re working with a new client or handling a temporary, one-off project. Here’s when choosing PayPal really pays off:
- Earning Client Trust Quickly: When your client insists on PayPal, accepting payment through PayPal Business gives them confidence. This simple move can help you land the project, especially for that first-time, trial, or short-term assignment.
- Fast, No-Hassle Account Setup: You can set up your PayPal Business account for free without any lengthy paperwork.
- Ideal for Low-Ticket Jobs: If your job is in the $50–$500 range, say, a sample export or pilot service, the convenience outweighs the transaction costs. It’s an easy way to collect payments that aren’t big enough compared to complex setups like wire transfers. Moreover, your clients also have the option to pay with their card, PayPal, or Apple Pay, even if they don’t have a PayPal account.
- Extra Security for Sellers: PayPal’s seller protection may cover you on eligible payments for issues like non-payment or disputes. This is like an insurance coverage, as it protects your income when you’re dealing with a client you’re not familiar with.
When to consider switching from PayPal to Skydo (or using both)
PayPal Business offers advanced features for exporters, and its fee structure is aligned with small or one-off projects. But does it make sense to pair PayPal with another payment platform like Skydo? Let’s walk through a few practical scenarios:
- Starting with PayPal to Secure New Clients: PayPal’s global recognition helps your client feel confident and reduces barriers to closing the deal. You can quickly send professional invoices or payment links at no initial cost.
- When to Consider Switching to Skydo: Once you have regular clients and invoice amounts grow (typically between $500 and $20,000), it’s worth looking at Skydo. Skydo uses flat fees and real mid-market forex rates with zero markup. This shift will improve your bottom line with larger, recurring B2B exports. It’s also easier to quote net pricing to your clients because there are no hidden charges.
- Skydo’s Compliance and Client Convenience: Skydo also offers better support for Indian export documentation. While PayPal provides Foreign Inward Remittance Advice (FIRA) statements monthly, Skydo provides FIRA and eBRC (only for Amazon sellers) for each payout.
Simple comparison snapshot
Based on what we have covered so far, here’s a simple snapshot comparison of PayPal and Skydo:
| Feature/Use Case | PayPal Business Account | Skydo |
| New/Hesitant Clients | PayPal has the global trust badge. It is easier to win a new client’s trust, which means it’s easier to get paid | If your new client is hesitant to try a new payment method or prefers a super quick way to pay, then choose PayPal. If they are open, Skydo’s InstaLinks is a great alternative to get paid by your client using a single payment link, saving you a lot more than PayPal |
| Fees & FX Transparency | Complex, higher effective cost. Includes transaction fee (4.40% + fixed fee) and FX markup (3–4%) | Live FX + transparent pricing. Uses flat fees and zero FX markup on the mid-market rate |
| Export Docs (FIRA/eBRC) | Monthly digital FIRA provides a consolidated list of transactions | Built-in automated export-grade documentation. Provides FIRA and eBRC (for Amazon Sellers) per transaction |
| Best For | One-off projects, low-ticket clients, or when the client insists on PayPal | Recurring B2B exports, marketplaces, services, especially for invoices between $500–$20,000 |
Keep the most of your export earnings with Skydo
A PayPal Business account is worth considering, given its presence and reputation. But as your business grows, and you start accepting larger payments, its fee structure takes a deep cut from your income. You must look for payment alternatives that are better suited for Indian exporters.
Skydo is an India-based fintech company designed keeping in mind the challenges of Indian businesses. It offers virtual bank accounts in USD, EUR, GBP, and more, so you can receive payments from overseas clients like a local vendor. If most of your clients are in the US, Skydo’s InstaLinks offering is worth exploring. It works like a PayPal Link, but costs a lot less. You share a customized payment link with a client on email or WhatsApp, and they tap on the link to complete the payment using their Credit Card or net banking. No sign up required. Skydo’s transparent flat fees and live mid-market currency rates mean you keep more of your foreign earnings. Plus, our India-based support team assists you with onboarding, compliance, and ongoing operations to help you grow your business.
Here’s a quick look at how the fees compare for typical international payments:
| Fee type | Paypal Business Account | Skydo |
| Transaction Fee | 4.4% + fixed fee per transaction | Flat fee: $19 up to $2,000; $29 for the amount between $2,001 and $10,000; 0.3% above $10,000. For instalinks, it is 5% of the transaction amount. |
| Currency Conversion | 3–4% markup on exchange rate | Live mid-market rate, zero forex markup, for instalinks as well. |
| FIRA Documentation | Consolidated monthly FIRA | Instant per-transaction FIRA |
Sign up for Skydo to maximise your export earnings and simplify international payments.
Is a PayPal Business account available in India?
Yes. Indian exporters can open a PayPal Business account to receive international payments (exports only).
How do I open a PayPal Business account in India?
What are PayPal Business fees in India?
Can I hold USD in my PayPal Business account in India?
PayPal Business vs Skydo—when to switch?
