How PayPal can be used to transfer money to India.

On 1st November 2007, PayPal introduced EFT (Electronic Fund Transfer) and fund transfer through cards to Indian customers. This means in 4-7 days time, Indian customers can withdraw funds to their bank accounts or to verified credit cards. Earlier it required 35-45 days to withdraw by cheque.

This new feature is amazingly useful if you are doing business through PayPal or if you are a NRI. NRIs can utilize this fast remitting facility from PayPal to send money home. Here is how you can do it.

Remitting to Credit Cards:

Step: 1 – Create a PayPal account in the name of beneficiary. You are required to own a Credit Card in the same name to verify the account. PayPal verification is required for transferring funds more than $500. (Now Indian banks give free life time credit cards for variety of reasons; hence it should be easy for a NRI)

Step: 2 – Add funds to this PayPal account. For NRIs, this can be done by opening another PayPal account (and using their credit/debit cards or bank accounts for funding) for themselves and then use send money feature from PayPal to your beneficiary’s PayPal account.

Step: 3 – Withdraw funds from beneficiary’s account to credit card. Once you have verified the credit card, PayPal allows you to withdraw up to $500 on a daily basis. There is a minimum withdrawal amount of $15 / withdrawal.

Normally, Credit Cards can be used at all ATMs. Hence with in short time span of 4-5 days, you can withdraw funds to your beneficiary’s credit card. This way, you can avoid the hassle of using other transfer methods.

Remitting to Bank Accounts (By Electronic Fund Transfer)

Using this method, PayPal allows you to withdraw upto 20000USD a month. Hence this way of sending money to India has become quite popular among working NRIs.

Step: 1 Create a PayPal account in the name of beneficiary. As described earlier, you need to have a credit card to enjoy full functionality of your PayPal account.

Step: 2 Add beneficiary’s bank account:
Currently PayPal supports EFT through the following Indian banks:

• State Bank of India
• Bank of India
• Canara Bank
• HDFC Bank
• ICICI Bank
• ING VYSYA Bank
• Union Bank of India
• Axis Bank
• Standard Chartered Bank
• HSBC
• Citibank

Before adding a bank account, you need the following:

• Ensure that bank account name is same as in PayPal account
• IFSC Code of beneficiary’s bank.
• Beneficiary's bank account number

IFSC (Indian Financial System Code) of your beneficiary’s bank can be found in the online IFSC directory of all Indian banks. You can also find the IFSC code of all bank branches in India from RBI website. [Excel Doc]

Add the beneficiary’s bank account using these data. Please note that it is required that bank account name and PayPal account names are exactly same. Otherwise PayPal won’t transfer your money may charge a fine to the returning amount.

This method has another advantage: you can add multiple bank accounts in the name of beneficiary. PayPal also allow you to withdraw funds to the family member of the beneficiary. For this, the family member should have same last name of that of beneficiary. Then you can withdraw to the family member’s bank account as well.

Step: 3 - Withdraw funds to beneficiary’s account. Once again funds can be added to beneficiary’s PayPal account by using PayPal send money feature.
PayPal charges Rs.50 for funds less than Rs. 7000 using EFT. The upper limit is 20000 USD / month.

Since it uses IFSC code, there is very little chance of error in whole transaction. From our experience; you will get your funds in about 3-4 days time. (Depends on the internal policy of banks)

Conclusion
PayPal was never used as a service for sending money to India. But this new feature and larger withdrawal limits make it undoubtedly the easiest method for every NRI to send money home. SendmoneyIndia.org team welcomes this new step taken by PayPal.