PayPal in India: Charges, Review and Alternatives

 If you’re an Indian business owner, freelancer, or exporter dealing with international clients, chances are you’ve considered using PayPal to receive payments.

PayPal’s global reach and ease of use have made it a popular choice worldwide. But how well does PayPal work in India, and is it the best option for you in 2025? In this comprehensive guide, we’ll answer key questions like “Does PayPal work in India?”, “What are PayPal’s fees in India?”, and “What are the alternatives to PayPal in India?”.

We’ll also delve into PayPal’s safety, pros & cons, and latest updates, all in a conversational, reader-friendly tone. Let’s dive in!

PayPal in India: Overview and Key Facts

PayPal’s Presence

PayPal is very much available in India for cross-border transactions. It enables Indian businesses and freelancers to accept payments from abroad in over 100 currencies with just an email address.

You can integrate PayPal into websites for card payments, send payment links or invoices, and even offer subscription billing to clients. PayPal also provides monthly digital FIRA (Foreign Inward Remittance Advice) statements to Indian users as proof of incoming foreign payments – a useful feature for exporters and compliance.

Supported Transactions

Yes, PayPal works in India, but with important limitations. PayPal does not support domestic INR payments within India.

This means you cannot use PayPal to send or receive money in INR between Indian accounts. PayPal India is focused exclusively on international transactions. Further, many features like PayPal credit and BNPL aren't available in India

Automatic Withdrawals:

Unlike some countries where PayPal balance can be held, in India any money received into your PayPal must be automatically withdrawn to your linked Indian bank account, typically on a daily basis.

You’ll need to link and verify an Indian bank account (for business accounts) to withdraw funds, which usually take 1–5 business days to reflect in your bank.  There is no withdrawal fee for standard bank transfers in INR (PayPal converts and transfers the amount to your bank without extra charge for the transfer itself), though currency conversion fees will apply.

KYC and Compliance:

To use PayPal in India, you must complete KYC verification. For individuals, this means linking and verifying a PAN (Permanent Account Number) and a card; for businesses, providing business PAN/GST and linking a bank account is required.

PayPal complies with RBI guidelines, so features like a stored wallet balance are not offered to Indian users – all transactions are settled to the bank directly. On the plus side, PayPal’s service comes with documentation support: it offers monthly digital FIRA (Foreign Inward Remittance Advice) certificates to help Indian exporters document their earningsskydo.com.

Safety & Security

Is PayPal safe to use in India? Generally, yes – PayPal is known for robust security measures. It uses end-to-end encryption, secure vaults for financial info, and 24/7 fraud monitoring to protect your funds. PayPal also offers Buyer Protection for customers and Seller Protection for merchants on eligible transactions, adding an extra layer of trust. These programs can reimburse you if, for example, an item doesn’t arrive or if there’s an unauthorised transaction.

Despite its strong security reputation, no platform is 100% immune to issues. In early 2025, there was an isolated incident in Singapore where some users saw unauthorised transfers initiated by hackers. PayPal clarified and addressed the issue, and it does not appear to reflect any systemic security flaw for Indian users. Overall, PayPal’s security track record in India remains solid, and it’s considered a trustworthy platform for online payments.

Bottom Line: PayPal in India is a credible and convenient option for international payments, but it’s strictly for cross-border use. You can’t use it like a local wallet or UPI – no domestic transfers, no local peer-to-peer payments. If you’re a freelancer or business, you’ll need a PayPal business account to receive overseas funds, and all earnings will be converted to INR and moved to your bank. Keep in mind these limitations as we explore the costs and alternatives in the sections below.

PayPal Fees and Charges in India – What Does It Cost?

One of the most important considerations is the cost of using PayPal in India. Unfortunately, convenience comes at a price.  Receiving international payments through PayPal India involves three types of fees:

To summarise, if you receive an international payment via PayPal India, you’ll typically pay: 4.4% + a fixed fee + ~4% in currency conversion markup. In formula form, PayPal fees = 4.4% + fixed fee + ~4% currency conversion fee.  This adds up quickly

Let’s illustrate the impact with a real scenario:

Scenario: You invoice a client $5,000 USD for a project, and they pay you via PayPal:

Transaction fee (4.4%): $5,000 × 4.4% = $220 in service fees

Fixed fee (USD): $0.30 (for USD transactions)

Remaining after PayPal fees (before conversion): $5,000 – $220.30 = $4,779.70.

Currency conversion: PayPal will convert $4,779.70 to INR at ~4% below the market rate. If the actual rate is ₹86 per $1, PayPal’s rate might be ~₹82.5.

So you’d get roughly ₹4,779.70 × 82.5 = ₹3,94,270 (approximately).

In this example, PayPal effectively took over 8% of the payment in combined fees. This aligns with what many users experience – PayPal’s fees can eat into your earnings substantially. For smaller payments, the percentage impact is the same, although the fixed fee is negligible; for larger payments, those few percentage points translate to a big rupee difference.

💡 Tip: Always factor in PayPal’s fees when setting your prices or invoices for international clients. You may decide to slightly increase your rates or add a line-item surcharge for PayPal payments to offset the ~8% loss, or negotiate with your client to split the fees. Some freelancers explicitly state “+X% if paying via PayPal” to cover these charges.

Are there any other charges?

In India, PayPal’s fees are subject to 18% GST (Goods & Services Tax), but this tax is charged on the fees itself, not on your whole amount. PayPal provides a consolidated GST invoice each month for the fees it has collected, which you may use to claim input credit or refunds if applicable to your business

PayPal in India: Pros, Cons, and User Experiences

To make an informed decision, it’s important to weigh the advantages and disadvantages of PayPal for Indian users. Below is a balanced look at where PayPal shines and where it falls short, along with some insights from real users:

✅ Pros of Using PayPal in India

❌ Cons of Using PayPal in India

User Feedback Summary (based on reviews from G2 and Reddit)

Across review platforms like G2, PayPal consistently scores 4/5 or higher for its ease of use, global reach, and platform reliability. Many users appreciate how seamlessly they can receive international payments and highlight that clients trust PayPal for its security and brand familiarity.

That said, several reviewers do raise concerns around costs—particularly related to transaction fees and currency conversion. As one user noted on G2:

“Customers love to pay through PayPal because it’s secure and easy... but the fees are a bit high... especially currency exchange fees.”
(Source)

Another review mentioned:

“When I received money, the exchange rate they provided was ₹82 when the actual rate was ₹86 – it makes a lot of difference for big amounts.”
(Source)

On community forums like Reddit, you’ll find more informal user commentary, with some Indian freelancers saying PayPal’s fees feel steep for regular use or preferring alternatives like Wise or U.S.-based setups. Phrases like “PayPal is too expensive for India” and “I only use it if the client insists” appear frequently. (Reddit example)

⚠️ Note: These insights are sourced from independent user reviews on platforms like G2 and Reddit. They reflect individual experiences, not the opinion or endorsement of Skydo.

Best PayPal Alternatives in India (2025)

Given PayPal’s charges and limitations, many Indian freelancers, businesses, and exporters are exploring alternative platforms to receive international payments. The good news is that today there are several reliable options that can often save you money (and sometimes headaches). Here we’ll outline a few of the top PayPal alternatives for users in India, and how they compare:

1. Skydo – Low-Cost Solution Built for Indian Businesses

Skydo is an India-based fintech platform specifically designed for cross-border payments. It’s a popular emerging alternative because of its dramatically lower fees and India-friendly features.

Skydo charges a flat fee instead of a percentage – for instance, $19 for payments up to $2,000, $29 for payments up to $10,000, and 0.3% for amounts beyond $10k. There are no fixed per-transaction fees and no forex markup on the exchange rate. This means you get the real mid-market rate (zero margin) for USD/INR or other currency conversions, and you only pay that flat fee.

In practice, Skydo often ends up being ~5-8 times cheaper than PayPal for the same transfer amount. For example, on a $5,000 payment, instead of paying around $415 with PayPal, with Skydo you’d pay around $29 in fees and get the full exchange rate – saving you over ₹30k in that single transaction.

Other benefits of Skydo include: instant virtual bank accounts in major currencies (so your US/EU clients can pay into a local account that routes to you), auto-generated FIRA for every transaction (no need to request it),  and an India-based support team for customer service.

The platform is focused on receiving payments (inbound), not for sending, so it’s tailored to freelancers and exporters getting paid from abroad.  Do note, Skydo currently doesn’t support credit card payments from clients – it’s more for bank transfers and online payments – so if your clients insist on paying by card or you have very small ticket invoices, it might not be as optimal.

But for most business transactions, the cost savings are significant. In short, Skydo offers a fast, secure, and far more cost-effective alternative to PayPal for Indian users who want to keep more of their earnings.

2. Wise Business (formerly TransferWise) – Transparent Mid-Market Rates

Wise is globally known for its ultra-transparent approach to international money transfers. Wise offers multi-currency accounts where you can receive money in different currencies (USD, EUR, GBP, etc.) and then convert to INR at the real exchange rate with no markup.
 Instead of taking a cut on the rate, Wise charges an upfront transfer fee, which is usually around 1.6-1.8% depending on currency corridors and amount. For example, receiving $1000 via Wise and converting to INR might cost you ~$16.65 in fees plus an additional $2.50 for FIRA total (versus ~$80+ with PayPal). Wise is highly praised for giving the best exchange rates – essentially the same rate you see on Google. The platform is very user-friendly and is a great choice if you want to withdraw money to your Indian bank with minimal loss.

Few considerations: Currently, Wise Business only supports freelancers and sole proprietorships in India. Private limited and other business types currently cannot use Wise Business to receive payments.

Also, you can only request up to $10,000 per invoice with Wise Business. 

 If you value saving on fees and getting a fair rate, Wise is one of the best alternatives to PayPal. It’s especially good for smaller payments or very frequent transfers, where PayPal’s fixed fees and % really add up.

3. Payoneer – Widely Used for Freelancers & Marketplaces

Payoneer is another established player that many Indian freelancers use, especially those working with global marketplaces like Upwork, Fiverr, Airbnb, Amazon, etc. Payoneer provides you with receiving accounts in multiple currencies (much like Wise and Skydo), so clients can pay to a local account. 

Payoneer’s fee structure: if your client pays you via Payoneer (for example, via a Payoneer invoice or if you withdraw earnings from a marketplace), the fee is usually between 0% to 3% of the amount (0% if the client pays from their Payoneer balance or certain methods, up to 3% if via credit card) 

Then, converting to INR and withdrawing to your bank costs up to 3% in currency conversion fee. So effectively ~2-6% total cost. 

Payoneer has the advantage of being accepted on many platforms – for example, if you freelance on Upwork, you can withdraw funds to Payoneer and then to your bank. It also offers a prepaid MasterCard (though I’m not sure if that’s available to Indian users currently) and the ability to make payments to others in the Payoneer network.

Payoneer's fee structure, though less than PayPal can be pricey, especially if you don’t use the account frequently. For example, there’s an annual inactivity fee (around $29.95) if your account remains dormant for 12 months, which can catch occasional users off guard. Additionally, some services—like currency conversions or card usage—may have their own associated charges. That said, Payoneer remains a well-established and trusted alternative to PayPal, particularly for users looking for a global wallet experience with a stronger business focus and more competitive transaction fees.

4. Stripe – Payment Gateway for Businesses (Selective in India)

Stripe is a leading global payment infrastructure company – if you’ve ever paid by card on popular websites, Stripe might have been working behind the scenes. For Indian businesses, Stripe can be considered an alternative to PayPal if you need to accept international credit card payments directly. Stripe allows you to charge customers’ cards in their currency and deposit INR to your Indian bank.

Stripe’s fees for international cards in India are around 4.3% + ₹7 per transaction, plus a 2% currency conversion charge. This totals roughly 6.3% fee, which is a bit lower than PayPal’s effective 8% but still significant.

Stripe currently, however, has some limitations in India: it operates on an invite-only basis (you have to request access) and doesn’t support all business types. Also, Stripe does not provide FIRA documentation for your transfers, since it routes through local bank processes. So if compliance paperwork is important, that’s a gap.

Stripe is best suited for more tech-savvy businesses that need a fully customizable checkout and are okay with integrating API

5. Others (Xoom, Wire Transfers, etc.):

There are other ways to receive money from abroad. Xoom is actually a PayPal-owned service for remittances, but it’s geared towards individuals sending money (say, someone in the US sending to family in India).

It’s not meant for business payments and often can’t be used for commercial transactions. Wire transfers (SWIFT) directly to your bank are an old-school method; they’re secure but can be slow (3-5 days) and expensive (the sender and receiver’s banks each take fees, plus poor exchange rates). Typically, a $50 wire fee + bad rate can mean you lose $100 on a $1000 transfer – not great.

Choosing the Right One: When evaluating a PayPal alternative, consider factors like fees, exchange rate markup, speed of transfer, ease of setup, support quality, and whether they provide FIRA or GST invoices (if you need those). For example, if the lowest cost is paramount, Wise or Skydo’s zero-markup solutions will shine.

If your clients insist on card payments, you might lean towards PayPal or Stripe (Skydo doesn't support client card payments in the same way). If you work via marketplaces, Payoneer might integrate better. Some users even use a combination: e.g., use PayPal for certain clients who prefer it and Wise for others, or initially accept PayPal, then suggest an alternative for future payments once trust is built.

Ultimately, many businesses start with PayPal for its sheer convenience and then transition to a cheaper alternative as they grow. With options like Skydo now offering India-centric features (low fees, compliance docs, local support), switching has become easier and more beneficial. The next section gives you some general tips on what to consider when making this choice.

Key Factors to Consider (How to Choose the Right Platform)

Whether you stick with PayPal or opt for an alternative, here are some essential factors you should consider when choosing an international payment platform for your needs:

Considering these factors will help you align the payment platform with your business needs. You might prioritise cost above all, or maybe ease-of-client-use is non-negotiable for you – it depends on your situation. Sometimes, using multiple methods is the way to go: for example, use PayPal or credit card options for customers where convenience is key, but use a low-cost method like Wise/Skydo for larger payments or repeat clients to save money.

Conclusion: A Smarter Way to Get Paid

PayPal is globally trusted and convenient—but for Indian freelancers, businesses, and exporters, it often comes at a cost. Between transaction fees, forex markups, and limited flexibility, the earnings you lose can add up fast.

That’s why many are switching to platforms like Skydo—built specifically for Indian exporters. With live exchange rates, no forex markup, and transparent flat fees, Skydo helps you keep more of what you earn. Plus, you get instant virtual accounts, auto-generated FIRA, and India-based support—everything PayPal doesn’t offer in one place.

If you’re serious about scaling your international payments, Skydo isn’t just an alternative—it’s an upgrade.

Try it once. You’ll wonder why you didn’t switch sooner.