How to get Cash from PayPal in India

PayPal is an easy way to send and receive money online. Many Indians sell services and products on the web and use PayPal as the medium to accept the payments. The money earned in PayPal can be easily cashed in India.

Cash PayPal Money in India

A PayPal account is like a virtual bank account. You can move the money in your PayPal account to an Indian bank account in two main ways:

1) Electronic Transfer to Bank Accounts:

You can transfer your PayPal money directly to your bank account, through electronic transfer (NEFT). Make sure that PayPal account is linked to a verified your bank account to avail this facility. The detailed steps are as follows:

Step 1: Log in to your PayPal account and click “My Account”

Step 2: Click “Withdraw” on the top

Step 3: Click on “Withdraw funds to bank account”

Step 4: Enter the details like amount and choose the appropriate bank account from the drop down menu. You will be asked for a Purpose code that is set mandatory by the Reserve Bank. This code defines the nature of the transaction to the banks.

The detailed list of Purpose code is available at the Official PayPal Blog.

Step 5: Submit the request.

You should receive the requested money in your bank account in the next 3 to five working days. Please make sure that the account holder name for the bank account and name on Paypal account are same. Otherwise, the transfer may be revoked after deducting the transfer fees, around Rs.250.

2) Depositing PayPal Cheques:

You can withdraw your PayPal money by requesting cheques and depositing them in your Indian bank accounts.

The detailed steps are:

Step 1: Log into your Paypal account and click “My Account”

Step 2: Click “Withdraw” on the top

Step 3: Choose “Request a Cheque”

Step 4: Enter the amount. Please note that Paypal charges $5 for processing the cheque. So remember to include that too in the amount to be withdrawn. Furthermore, enter the mandatory Purpose Code correctly.

Step 5: Recheck that the address in the account information is correct.

Step 5: Submit the request.

PayPal takes 4-5 days to process a cheque. It can take another 15-30 days to get delivered at your address. Once you receive it, you can deposit it in your bank account to cash it. Make sure that you deposit it in a bank account with the same account name, as in the PayPal cheque.

Earlier, PayPal money could be withdrawn directly to your credit cards also. At the time of writing this article this facility is suspended in India.

Legal Issues concerning Usage of PayPal in India

In March 2010 The Government of India issued a few regulations in carrying out PayPal transactions in India. Hence, PayPal suspended all the withdrawals to India at that time.

This was because RBI wanted all the proceeds from exports to be transparent to the Government. To facilitate that, a Purpose Code was introduced that will notify the bank of the nature of the export. If your business is big and withdrawal amounts are huge, banks can also ask you to furnish documents that certify the nature of the business. This is required to cash your PayPal money in India.

As per this PayPal can be used only for transactions involving sale or export of goods and services. PayPal can no longer be used to remit money to India from abroad. Moreover, if you run a charity organization that accepts PayPal, you need to look for another way to accept donations from outside India.

PayPal is a pal for all, who are working on the web. The multiple withdrawal options help you to access your money the way you want. Let us hope that PayPal team will introduce easier withdrawal options to convert PayPal money to Rupees in India.