Is PayPal available in India?

Yes, PayPal is available in India, but only in a limited capacity.

This is where most confusion begins. Many users assume that PayPal works in India the same way it does in the US or Europe, but that is not the case.

PayPal operates in India as a cross-border payment aggregator but not as a full-fledged digital wallet or domestic payment platform. Its operations are governed by RBI regulations, which restrict how foreign payment companies can handle domestic money movement.

Because of this regulatory framework, PayPal is permitted to facilitate international transactions. But at the same time, it is restricted  from offering domestic peer-to-peer or wallet-based services.

Understanding this difference is very important before deciding whether PayPal is right for your use case.

Read more: Infinity vs PayPal: Who saves you more on FX?

How does PayPal work globally?

In most countries, PayPal functions as a digital wallet and payment gateway combined. PayPal allows its users to:

• Create a personal or business account to transact money.

• Link bank accounts, debit cards, or credit cards to your PayPal account.

• Send and receive money instantly between PayPal users.

• PayPal allows users to hold balances in multiple currencies.

• PayPal is integrated with multiple online marketplaces for online purchases with one-click checkout.

For businesses, PayPal also offers advanced merchant tools such as:

• Payment buttons, checkout integrations and subscription billing.

• Buyer and seller protection programs

For international clients, especially those based in the US or Europe, PayPal often feels like the safest and most familiar way to pay overseas vendors. However, this full global feature set does not apply uniformly to all countries. And India is a key example of where PayPal’s functionality is significantly restricted.

What are the key limitations of PayPal in India?

PayPal in India comes with several important restrictions that users must be aware of:

• Indian PayPal users cannot send or receive money within India. You cannot transfer INR to another Indian PayPal account.

• Unlike global users, Indian users cannot hold funds in their PayPal account and cannot store foreign currency balances. Basically, all incoming payments are automatically withdrawn to your linked bank account, usually within 24 hours.

• Many PayPal features available globally are either restricted or unavailable in India. These features include advanced subscription billing, certain marketplace and platform tools.

PayPal India vs PayPal Global: A Quick Comparison

This comparison clearly shows that PayPal India is designed for one primary use case: receiving international payments and withdrawing them instantly to an Indian bank account.

Step-by-Step: How to set up a PayPal account in India

Opening a PayPal account in India is relatively straightforward, but choosing the right account type, like a business account or a personal account and then completing KYC correctly is crucial.

Many Indian users face account limitations or delays simply because they select the wrong account type or miss a verification step.

Here is how you can set up a PayPal account in India:

• Visit the official PayPal website at www.paypal.com

• Choose your account type. Personal account or Business account)

• Enter your email address and create a secure password.

• Fill in basic details like - full legal name, mobile number, and address.

• Link your PayPal account to an Indian bank account for withdrawals.

• Complete the verification process.

The sign-up process takes a few minutes, but the account activation depends on completing KYC.

What are the KYC requirements for PayPal in India?

To comply with Indian regulations, PayPal requires the following information:

• PAN card (mandatory for receiving payments)

• Linked Indian bank account in your name

• Email and mobile number verification

• Business details (for business accounts)

If PAN verification is not completed, PayPal may:

• Limit your account

• Hold incoming payments

• Temporarily suspend withdrawals

There are some common issues that users might face while setting up the account. Here are some key tips:

• Use the same name on your PayPal account, PAN, and bank account.

• Complete email verification immediately after sign-up

• Avoid linking multiple bank accounts unnecessarily.

• Choose a business account if you expect regular international payments.

Taking these steps early can save you from account reviews and payment delays later.

How to use a PayPal account in India?

PayPal’s usefulness in India depends entirely on how you plan to use it. While it does serve a few important international payment needs, it also comes with non-negotiable restrictions that every Indian user must understand upfront.

A. Receiving Money from International Clients

This is the primary and most common use case for PayPal in India.

Indian users can receive payments from:

• Overseas freelance clients

• International businesses

• Global marketplaces and platforms

• Foreign customers purchasing digital or physical goods

How the Receiving Process Works

1. You share your PayPal email ID or invoice with your international client.

2. The client pays using their PayPal balance or a debit/credit card.

3. The payment is credited to your PayPal account.

4. The amount is automatically withdrawn to your linked Indian bank account.

Unlike global PayPal accounts, Indian users do not get the option to hold the funds.

The settlement timeline of PayPal in India is as follows:

• Payment received: Instantly or within a few minutes.

• Auto-withdrawal initiated: Usually within 24 hours.

• Bank credit: Typically 1–3 business days

In most cases, Indian users see funds credited to their bank account within 2 working days, though delays can occur during weekends or bank holidays.

B. Using PayPal for Overseas Purchases

Indian users can also use PayPal to make payments on international websites, which is another common use case.

You can pay for international SaaS tools and subscriptions, Global e-commerce websites and digital services hosted outside India.

How Payments Work for Indians

To make overseas payments using PayPal, you need to link an internationally enabled debit or credit card. Or link an Indian bank account (where supported).

PayPal acts as a payment intermediary, so your card or bank details are not directly shared with the merchant.

However, users should note:

• PayPal applies currency conversion charges.

• Exchange rates are typically higher than mid-market rates.

This makes PayPal convenient, but it is not always the most cost-effective for international purchases.

Frequently Asked Questions about PayPal use in India

1. Can Indians send money using PayPal?

No. Indian users cannot send domestic money via PayPal. It only supports receiving international payments and making overseas purchases.

2. How long does PayPal take to transfer funds to a bank in India?

PayPal typically takes 1–3 business days after auto-withdrawal is initiated.

3. Can PayPal hold foreign currency in India?

No. Indian PayPal accounts cannot hold or store foreign currency balances.

Infinity: The smartest choice for international payments in 2026

As Indian businesses become more global and payment volumes grow, cost efficiency, speed, and regulatory clarity matter more than brand familiarity.

This is why many Indian exporters and freelancers are now shifting toward India-first cross-border payment platforms like Infinity, which are built specifically to help Indian businesses:

• Receive international payments at lower fees- Infinity helps Indian professionals receive international payments at just 0.5% (inclusive of all), which is the lowest in the market.

• Avoid hidden FX markups- Infinity does not charge any FX markup or hidden fees. This means the money received is converted at live exchange rates.

• Get faster settlements- Infinity settles your payment within 24 hours.

• Stay fully compliant with Indian regulations- Infinity is compliant with RBI’s FEMA regulation. Infinity provides free and instant FIRA after every successful transaction.

For businesses serious about scaling globally, choosing the right payment infrastructure can directly impact profitability, and PayPal may no longer be the most efficient option in 2026.

Sign up with Infinity now!