Yes, PayPal now accepts UPI, but only for international payments. Through its PayPal World platform, launched in fall 2025, Indian users can select UPI at checkout when shopping on foreign websites that accept PayPal.
This partnership with NPCI International Payments Limited makes UPI a founding payment system on the platform. However, PayPal still does not support UPI for domestic payments within India.
Can You Use UPI on PayPal?
You can use UPI on PayPal, but only when making cross-border payments through the PayPal World platform.
PayPal World connects major payment systems from different countries on a single platform. NPCI International partnered with PayPal to bring UPI into this ecosystem as one of the first launch partners.
This means if you shop on an international website that accepts PayPal, you may see a UPI option during checkout.
You can complete the payment using your existing UPI app like Google Pay, PhonePe, or BHIM.
However, this integration has clear boundaries:
- Works for: Shopping on international websites, paying global merchants, and certain cross-border transactions through PayPal
- Does not work for: Domestic payments between Indian users, paying local merchants within India, or transferring money to another Indian PayPal account
PayPal stopped domestic payment services in India from April 1, 2021. That restriction still applies. The UPI integration only covers the international side of PayPal’s services.
Can You Link Your UPI ID to PayPal?
You cannot permanently link your UPI ID to your PayPal account the way you link a credit card or bank account.
The UPI option appears during the payment process on PayPal World.
When you choose UPI at checkout, you enter your UPI ID (like name@okaxis or mobile@upi) at that moment. A payment request then goes to your UPI app for approval.
Think of it as a one-time payment method rather than a saved card. Each time you want to pay, you select UPI, enter your VPA, and authorize through your UPI app.
This is different from how PayPal handles credit or debit cards, which can be stored permanently in your account.
Why Doesn’t PayPal Support UPI for Domestic Payments?
PayPal now supports UPI for international transactions. But it still does not offer UPI for payments within India. There are specific reasons for this.
PayPal exited India’s domestic payments market. In February 2021, PayPal announced it would stop offering domestic payment services within India from April 1, 2021. The company decided to focus entirely on cross-border payments.
The Indian UPI market is intensely competitive. Apps like PhonePe, Google Pay, and Paytm already dominate India’s UPI ecosystem. UPI processes over 640 million transactions daily.
Established domestic players hold the vast majority of the market share. Competing in this space would require massive investment from PayPal.
Regulatory requirements differ for domestic operations. Operating a domestic payment service in India requires separate licenses under RBI guidelines.
PayPal currently holds in-principle approval only as a Payment Aggregator for Cross-Border Exports (PA-CB-E), granted in May 2025. This does not cover domestic transactions.
PayPal’s global strategy shifted. CEO Alex Chriss has stated that rather than competing with UPI inside India, it makes more sense to connect India to the world.
This is exactly why PayPal World focuses on interoperability between domestic wallets across countries.
What Payment Methods Does PayPal Accept in India?
Since PayPal only handles cross-border payments in India, the available payment methods are limited compared to what users in other countries get.
Here is what Indian users can currently use on PayPal:
| Payment Method | Supported? | Notes |
|---|---|---|
| Credit Card | Yes | Visa and Mastercard are supported, with international transactions enabled |
| Debit Card | Yes | Must support international online payments |
| PayPal Account Balance | Yes | Auto-withdrawn to the linked bank account daily |
| UPI (via PayPal World) | Yes | Only available for international merchant payments |
| Net Banking | No | Not available for PayPal India |
| Wallets (Paytm, PhonePe) | No | Not supported on PayPal |
Source: PayPal India Payment Methods
Credit and debit cards remain the primary payment methods for Indian users on PayPal. Your card must be internationally enabled for payments to process.
If you are wondering how these two options differ, understanding the key differences between credit cards and debit cards can help you choose wisely.
Using a credit card on PayPal gives you an extra layer of buyer protection. Many credit cards also offer dispute resolution and chargeback rights.
Important: Indian PayPal accounts have daily auto-withdrawal. Any balance received is automatically transferred to your linked bank account, usually within 24 hours.
You cannot hold foreign currency in your PayPal India account.
What Are Your Options If You Want to Pay Using UPI?
If your goal is to make payments using UPI, several alternatives exist depending on whether you are paying domestically or internationally.
For domestic payments within India:
UPI works directly through apps like Google Pay, PhonePe, Paytm, and BHIM. You do not need PayPal for any domestic UPI transaction.
These apps let you pay merchants, transfer money, pay bills, and buy products at nearly every shop in India.
For international payments using UPI:
- PayPal World: As discussed, you can now use UPI at checkout on international websites that accept PayPal.
- UPI in foreign countries: NPCI International has expanded UPI acceptance to nine countries as of June 2026, including Singapore, UAE, France, Sri Lanka, and Cambodia. If you are travelling, you can use UPI to make payments at merchant locations in these countries.
- International credit card payments: For websites that do not support PayPal World, using an internationally enabled credit card remains the most reliable option. Some credit cards also let you redeem reward points earned from international spending, making them a cost-effective choice over time.
Can Indian Businesses Receive Payments Through PayPal?
Yes. Receiving international payments is actually PayPal’s primary use case in India today.
Indian freelancers, exporters, and businesses use PayPal to receive payments from overseas clients.
In May 2025, PayPal received in-principle approval from RBI to operate as a Payment Aggregator for Cross-Border Exports (PA-CB-E). This allows it to facilitate export payments to approximately 200 markets.
Here is a quick look at the costs involved:
| Fee Component | Rate |
|---|---|
| Transaction Fee | 4.4% + $0.30 per payment |
| Currency Conversion Markup | 3% to 4% above the mid-market exchange rate |
| GST on PayPal Fees | 18% |
| Withdrawal from Indian Bank | Free (auto-withdrawal daily) |
Source: PayPal India Merchant Fees
The total effective cost typically falls between 5% and 8% of the invoice amount once all layers of fees are counted.
This matters because many Indian freelancers receiving $1,000 invoices lose roughly Rs. 5,000 to Rs. 8,000 in combined fees.
Comparing PayPal with alternatives like Wise or Payoneer can help you decide the most cost-effective option for your situation.
Key restriction: Indian businesses cannot use PayPal to receive domestic INR payments from other Indian PayPal users. This limitation has been in place since April 2021.
Common Misconceptions About PayPal and UPI
Several misunderstandings circulate about how PayPal and UPI work together. Here are the most common ones, clarified.
- “PayPal fully supports UPI in India.” Not accurate. PayPal supports UPI only through its PayPal World platform for cross-border transactions. You cannot use UPI on PayPal for domestic payments or transfers within India.
- “You can link your UPI ID permanently to PayPal.” This is incorrect. UPI works as a checkout-time payment option, not as a permanently saved payment method like a credit card. You enter your UPI ID during each transaction on PayPal World.
- “PayPal left India completely.” PayPal exited the domestic payments business in April 2021. It continues to operate actively for cross-border payments.
- Indian businesses and freelancers still use PayPal daily to receive international payments.
- “UPI and PayPal are competitors.” They serve different purposes in India. UPI handles domestic real-time payments. PayPal focuses on international transactions.
- With PayPal World, the two systems now complement each other, allowing Indian users to pay global merchants through UPI.
- “PayPal is not regulated in India.” PayPal received in-principle RBI approval as a PA-CB-E in May 2025. It operates under Indian regulatory oversight for its cross-border payment services.
Conclusion: PayPal accepts UPI only for International payments today
Through PayPal World, launched in partnership with NPCI International in fall 2025, Indian users can now pay international merchants using UPI at PayPal checkout. This is a meaningful step forward for anyone who shops on foreign websites but prefers UPI over credit or debit cards.
However, PayPal’s domestic exit from India in 2021 means you still cannot use UPI on PayPal for payments within the country. For domestic UPI payments, apps like Google Pay, PhonePe, and Paytm remain your best options.
FAQs
No. Indian PayPal accounts do not support loading funds via UPI. UPI is available only as a payment method at checkout on international merchant websites through PayPal World.
No. PayPal World is gradually rolling out to merchants. The UPI option appears only on international websites that have adopted the PayPal World platform. Availability may vary by merchant.
PayPal applies its standard currency conversion markup when converting international purchases to INR. The exact fees depend on the transaction currency, but PayPal typically adds a 3% to 4% markup above the mid-market exchange rate.
No. PayPal settlements to Indian users go to a linked bank account, not to a UPI address. Your received payments are auto-withdrawn to your bank account in INR, typically within 24 hours.
Any UPI app that supports payment collection requests should work. This includes Google Pay, PhonePe, BHIM, and Paytm. You authorize the payment request using your UPI PIN in whichever app is linked to your bank account.
