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PayPal vs Razorpay: which is better for international payments in 2026?

  • PayPal is recognised almost anywhere in the world, but it is also one of the priciest at ~9% all in
  • Razorpay is easy for existing domestic users, but the 1% fee grows large as your invoices get bigger
  • Which one is better comes down to your priorities: fees, FIRA handling, and how your clients prefer to pay
Accept payment from 150+ countries
USD
Client pays
USD 100USD 100,000
1 USD = 85.00 INR
Live fx rate
You'll receiveINR
₹4,22,091
PayPal
₹3,85,904
You lose:9.2%
Razorpay
₹4,19,985
You lose:1.2%
100+ reviews
Trusted by 40,000+ businesses
Over $1B processed • Licensed by RBI
RBI PA-CB authorizedHDFC BankISO 27001 certifiedVisa

PayPal vs Razorpay: understanding the key differences

While both PayPal and Razorpay let Indian businesses receive international payments, they differ in fees, export documentation like FIRA, GST compliance, settlement timelines, and customer support. Here is how they compare side by side.
Featurespaypalrazorpay
Transfer fees4.4% plus a fixed fee1% on bank transfers (cards 3%, wallets 3.5%)
Forex markupAround 4% above mid-marketZero, live exchange rate
FIRAWeekly consolidated FIRAAutomatic FIRA per transaction
eBRCNot supported, closed on DGFT after your bank issues the IRMNot supported, closed on DGFT after your bank issues the IRM
GST-compliant invoiceInvoicing tool, no India GST guaranteeBuilt-in invoicing tool that is GST compliant
Settlement time1 to 3 business days1 business day
Customer supportEmail, global help centerIndia-based support
Best suited forMarketplace payouts and global reachLower-value invoices where 1% takes a smaller cut

PayPal vs Razorpay: pricing and forex breakdown

PayPal charges about 4.4% plus a fixed fee and a roughly 4% forex markup, taking the total cost to ~9%, while Razorpay charges 1% on bank transfers and 3% on cards, but with no forex markup. Move the slider to see what each costs.
With Skydo, you receive₹8,47,091
Money transferUSD 10,000
$500$10K$100K$1M
paypal4% markup
₹7,71,838
Exchange rate81.60
Forex markup₹34,000
Transfer fee₹37,400
Fixed fee₹26
GST (18%)₹6,737
Total fees₹78,162
You receive₹7,71,838
razorpay0% markup
₹8,39,970
Exchange rate85.00
Forex markup₹0
Transfer fee₹8,500
Fixed fee₹0
GST (18%)₹1,530
Total fees₹10,030
You receive₹8,39,970

PayPal vs Razorpay: compliance, payment rails, and platform comparison

paypal
  • Issues FIRA as proof of inward remittance, though it comes weekly and consolidated, not one per payment
  • No automated eBRC, you close it on the DGFT portal once your bank issues the IRM
  • Has an invoicing tool, but it does not produce GST-compliant invoices for India
  • Assigns one broad purpose code by default, so a payment can be recorded under the wrong category
  • SOFTEX and EDPMS are handled separately, not by PayPal
razorpay
  • Generates a digital FIRA automatically for every transaction on the dashboard
  • No automated eBRC, you close it on the DGFT portal once your bank issues the IRM
  • Has a built-in invoicing tool that produces GST-compliant invoices
  • Leaves the purpose code to your AD bank at settlement, outside the payment flow
  • SOFTEX and EDPMS are handled separately, not by Razorpay

PayPal vs Razorpay: which one is right for you

There is no single winner. The right pick depends on who pays you, how large your invoices are, and how much paperwork you can handle.
01paypal

Choose PayPal if:

You want PayPal's global recognition and platform reach, and can absorb a higher fee for the convenience and built-in protection.
  • You are a freelancer or contractor whose overseas clients already insist on paying through PayPal
  • You are a new exporter who wants to register and start receiving today
  • You are a seller who values PayPal's global name recognition with buyers more than paying the lowest fee
  • You are a business that can live with weekly consolidated FIRA and filing eBRC and GST through your bank
02razorpay

Choose Razorpay if:

You want bank transfer rails and 1% pricing with zero forex markup, rather than PayPal's checkout and a higher effective cost.
  • You are an exporter or freelancer who wants to be paid by local bank transfer, like ACH, SEPA, or SWIFT, rather than card
  • You want 1% with zero forex markup instead of PayPal's roughly 9% effective cost
  • You want automatic per transaction FIRA, rather than PayPal's weekly consolidated one
  • You already run on Razorpay's India stack and want gateway, payouts, and collections in one dashboard

Skydo: a better alternative to PayPal and Razorpay

Featurespaypalrazorpay
Settlement time1 to 3 days1 business day24 hours
Forex markupAround 4%Zero, live rateZero, live mid-market
Transaction fee4.4% plus fixed1% on transfers$19 up to $2k, $29 up to $10k, 0.3% aboveBest
FIRAWeeklyAutomatic, per transactionFree, instant, per payment
eBRC and EDPMSNot supported, handled with your AD bankNot supported, handled with your AD bankOne-click eBRC, EDPMS closure assistance
GST invoicingInvoicing tool, no India GST guaranteeBuilt in, GST compliantBuilt in, GST-compliant
Customer supportEmail, global help centerIndia-based supportIndia-based, on WhatsApp, call and email
Payment trackingLimitedDashboard, payment statusAuto tracked, remittance to bank deposit
RBI authorisationIn-principle PA-CB (May 2025)Full PA-CB (Dec 2025)Full PA-CB authorized
Losing money on each transfer but not sure how much?

See what our clients say about us

100+ reviews
Trusted by 40,000+ businesses
Shashank
“I'm looking for straightforward, transparent pricing. With most payment providers, it's hard to understand the actual fees and exchange rates, making it difficult to know what I'm really paying.”ShashankCEO, HCODE

Frequently asked questions

Which is better, PayPal or Razorpay, for international payments in 2026?+
It comes down to how your clients pay you. PayPal is the most recognised option, but its 4.4% fee plus $0.30 and a 3% to 4% forex markup push the effective cost to around 9% of each invoice. Razorpay is built for international bank transfers at 1% with no forex markup, automatic FIRA, and settlement to your Indian bank in about a business day. PayPal suits the widest client reach, while Razorpay suits exporters and freelancers collecting by bank transfer.
Is PayPal cheaper than Razorpay?+
Usually not. PayPal runs about 4.4% plus a fixed fee and a roughly 4% forex markup, around 9% all in. Razorpay charges 1% on bank transfers with no markup, and 3% on cards or 3.5% on wallets. If your clients pay by bank transfer, Razorpay is cheaper.
Which provides better exchange rates, PayPal or Razorpay?+
Razorpay. PayPal builds in a forex markup of about 4% buried in the exchange rate, while Razorpay converts at the live exchange rate with no markup.
Do PayPal and Razorpay provide FIRA for Indian exporters?+
PayPal issues a weekly consolidated digital FIRA, not one per transaction, and does not automate eBRC. Razorpay generates a digital FIRA automatically for every transaction on the dashboard. Neither handles eBRC, so you still close it on the DGFT portal after your bank issues the IRM.
Are PayPal and Razorpay RBI-approved for receiving payments in India?+
PayPal holds in-principle Payment Aggregator Cross Border (PA-CB) authorisation from the RBI, granted in May 2025. Razorpay holds the full RBI PA-CB licence, granted in December 2025.
Is PayPal or Razorpay better for freelancers or businesses?+
Freelancers and exporters who get paid by international bank transfer are better served by Razorpay, with its 1% fee, automatic FIRA, and fast settlement. PayPal suits freelancers whose clients only use PayPal or who take small consumer payments.
Is there a better alternative to PayPal and Razorpay for receiving money in India?+
Skydo is built for Indian exporters and freelancers. It charges a flat fee ($19 up to $2k, $29 up to $10k, 0.3% above) that works out cheaper than a percentage fee as invoices grow, with zero forex markup on the live mid-market rate, instant per-transaction FIRA, built-in GST compliant invoicing, one-click eBRC and EDPMS closure assistance, India-based support on WhatsApp, call and email, and full RBI PA-CB authorisation.

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