How it works
Buyers log in to PayPal (or check out as a guest with a card), approve the payment, and the seller never sees their card or bank details. PayPal also offers invoicing, payment links, subscriptions, Pay Later instalments in some countries and Venmo in the US. Braintree, which PayPal owns, is its developer-focused gateway for larger merchants.
Since April 2021, PayPal in India has handled only international payments: an Indian freelancer, exporter or studio can receive money from clients abroad, but Indian customers cannot pay an Indian business through it. Each payment needs an RBI purpose code (such as export of software services), the money is withdrawn to an Indian bank account in rupees, and PayPal provides a FIRA as proof of the foreign payment.
Buyer protection lets customers open disputes, and PayPal charges sellers a dispute fee in some cases. Accounts that see unusual activity can have money held for a while, so keeping invoices and delivery records makes disputes easier to answer.
PayPal pros and cons
Pros
- Buyers in many countries already have accounts and recognise the button
- Indian sellers can receive money from abroad without a foreign company
- Quick to start with buttons, payment links or invoices
Cons
- In India it cannot take domestic payments at all
- About 4.4% plus a fixed fee, and around 3% more to convert to rupees
- Disputes and account holds can freeze money for a while
When to use PayPal
Pick it when
- Freelancers and studios billing clients in the US, UK or Europe
- Buyers abroad expect a PayPal button at checkout
Skip it when
- Your customers are in India, where a local gateway with UPI fits
- Margins are thin and the combined fee and conversion cost would eat them
PayPal pricing
Per transaction
Indian accounts pay about 4.4% plus a fixed fee on each payment received from abroad (0.30 USD on dollar payments), and converting to rupees costs about 3% above the base exchange rate.
PayPal pricing page (opens in a new tab)Approximate, checked September 2026.What the other tools cost
PayPal vs the alternatives
Related terms
More in Payments
Gateways