What is a PayPal Account?
Introduced in the year 1998 by Max Levchin and Peter Theil, PayPal is a payment gateway i.e. a web based application to facilitate transfer of funds between member accounts. Main aim behind introducing PayPal was to make online shopping and electronic payment as easy as taking out money from your wallet. One would just need to enter the recipient’s email address and the amount of money you intend to send it to them. Setting up a PayPal account and sending money via it doesn’t cost you anything; however, if you wish to receive money via PayPal, you need to check the fees for the same. Ever since the idea of PayPal was conceived till now, PayPal has gained its credibility in form of a reliable and secure payment gateway because it uses already existing infrastructure used by various financial institutions and credit cards. Also, it gives special emphasis on secure transaction and thus uses advanced fraud prevention technologies.
Today we live in a multi-country and multi-currency world and in order to justify and synchronize with the same, PayPal supports over 100 currency and if you are a merchant, you can earn in 57 currencies. Also, in order to be easily accessible by anyone, PayPal is both iOS and android compatible. Salient features of PayPal are as below:
- Its annual maintenance charge is nil.
- Transaction fee per transaction: 4.4% + US $0.30 + currency conversion charges.
- It has same day settlement policy i.e. all payments of same day gets auto-withdrawn to your local bank account on a daily basis.
- To start your PayPal account, all you would need is your PAN Card, a local bank account and a purpose code. Aim behind introducing purpose code is to see if the cross border transactions comply with the regulatory requirements and businesses are required to furnish the correct purpose codes from pre-filled dropdown section.
- Approx 341,497 websites across the world have got PayPal as their authorized payment gateway.
PayPal hit the limelight when it appeared as a payment facilitator for eBay auctions and in due course of time PayPal attained so much of popularity that it was made official transfer service for eBay and by the year 2015, PayPal became an independent company and ever since then millions of traders across the world use PayPal as their payment gateway.
How to set up business PayPal account in India?
When you start working online, you would need to set up the method in order to receive and send payment and to do so, you would need a payment gateway in place, preferably the one which deals in multi currency and language so that you can expand your business or work without thinking twice and PayPal is one such payment gateway which fulfills most of the requirement of a trustworthy payment gateway. Setting up a PayPal account for your business is quite simple, irrespective of whether you want to do the business locally or across the globe. Apart from what mentioned above, PayPal has its fair share of advantages, such as:
- You don’t have to worry about your credit card details being exposed and thus saves you from online theft.
- PayPal accepts debit cards as well thus those who don’t have credit cards, can avail services of PayPal.
- Unlike most of online services where you have to make recurring payments, with PayPal you can cancel the recurring payments at any point any point of time.
- PayPal gives you the option to create and send invoices directly to your clients.
- Bulk payment is also possible with PayPal.
In order to set up a PayPal account, one need to follow below mentioned steps:
- Create a PayPal account: The first and foremost step to create a PayPal account is to create an account with it and in order to do so, visit www.PayPal.com and click on “Sign Up” to create the account. Once you visit the webpage, you will have two options to choose from i.e. whether want to create an individual account or business account. If you are a starter, it is always better to start with personal account and later on upgrade to business account if required.
- Enter your card details: Once you select from the business or personal account, you would be asked to fill up a form which is basically a sign up form where you have to add certain details as asked. A business PayPal account in India is a limited PayPal account and can be used to both send and receive the payment using both credit and debit cards. As mentioned in above lines, sending money through PayPal doesn’t take much however in order to receive money, you need to fill in following details in the signup form:
- Pan Card: You would need to add your PAN card and see if the information entered here is correct because once entered and saved; your PAN card will be verified. You have to make sure that your PayPal account name is same as in your Pan Card and in case you are a minor and don’t have a Pan Card, you can open the account in the name of your parents.
- Email Confirmation: While setting up a PayPal account, a confirmation mail will be sent to your entered email id and you need to click on the same link in order to confirm your email id. Once confirmation process is done, the entered email id will be used to send and receive the payments.
- Add Bank Account: The bank account details entered here will be used for the settlement of your payments from your PayPal account. By adding a bank account, you can use the same to receive and withdraw the payments. Also PayPal will make two small deposits in your mentioned bank account within 3-5 business working days so it is important for you to log in to your PayPal account after 3-5 working days and enter the two amounts in order to lift the sending and withdrawal limit. To add your bank details to your PayPal account, you have to mention your name, your bank account and its IFS Code. IFS Code is an important field and in case you don’t know the code, you can always search for it in Google by using your bank name and branch.
- Provide Purpose Code: This is an important step in creating your PayPal account. The main aim behind having this field is to ensure that the global transactions are as per the regulatory standards. In this section, you have to choose from a long list of prefilled purpose code. For example, if you are receiving payment for Research and Development, you have to select R&D as your purpose code.
- Link Credit Card and Debit Card with PayPal Account: Linking a credit card to your PayPal account is quite simple and you can always add a new card, edit or remove the existing ones. When it comes to linking your Indian debit cards, cards from Axis, ICICI, HDFC and CITI bank works just fine for your PayPal account. However, in case there is any error message while adding your debit card, you can always contact their customer care and ask them to activate your international online transaction. While most of the Indian debit cards claim to have international transaction service, it is always better to consult their customer care section and check for the same. Once you have added your credit card to your PayPal account, you will also have to verify the same wherein a 4-digit code will be sent to you within 3-5 working days which you have to enter after logging in to your PayPal account and once verified, two small deposits will be made by PayPal as mentioned before. Verification is an easy process and helps to increase your PayPal limit.
- PayPal offers you alternate options apart from linking your credit/debit card in order to set up your business PayPal account such as:
- Credit Card: Majority of banks in India issue credit card in lieu of fixed deposits. For example, if you open a fixed account of Rs 50K, you can easily get credit card with limit 32-42K. This is an easy option to increase your PayPal limit as well.
- Virtual Credit Card: Facility given by selected banks such as Kotak, HDFC wherein they issue virtual credit card for the activation of your PayPal account. Apart from virtual credit card, easy credit card is also an option however, virtual credit card is safe because it has a timeline of 24 hours i.e. it can be used only once and expires automatically after 24 hours of its activation. It can also be used at places where you don’t know whether to trust or not because of its one-time usage feature. Virtual credit cards can be created easily by login to your online portal and select desired limit, which generally varies between Rs 100-50,000 for most of the Indian banks.
- Easy Credit Card: This is an alternate option to virtual credit card. You can avail easy credit card by making fixed deposit as security amount with your bank and they will issue you a real physical card with limit as per the deposit made by you.