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  • Category: Finance and Investments

    Is it better to receive foreign funds directly into bank or via Paypal to bank?

    Want to know if it is best to get payment in a foreign currency directly into your bank or via Paypal to your bank account? Know the better option from the answers at this Ask Expert page.

    Two of the advertisers to my blog have the option to receive payments directly to the bank or to the PayPal account. The amount will be in dollars and banks charge a certain amount for receiving foreign funds.

    Is it good to receive multiple funds into Paypal and then receive it as a single payment in bank? Which saves the money?
  • Answers

    7 Answers found.
  • Many companies can direct deposit into your account. But charges of such amount is high and it varies. Lets suppose you are getting payment of $120. Some times direct deposit may cost $25 , hence you will get $95 to you bank account.
    I suggest you to use paypal, link your bank account to paypal and get your payment directly to your bank account. Because it has less transaction as compared to direct deposit.
    But if you are big earner of like $1000, you can also opt for direct deposit. In this case i thing paypal fees may be higher then $25 of direct deposit..

  • I feel it is better if you link your bank account to PayPal account. For the customers, you can give the advice to deposit the money in your PayPal account. Once it is deposit in PayPal account automatically it will get deposited into your account. This will give you some savings in transaction charges.

    always confident

  • Your query is whether you can get paid via PayPal from overseas to India.

    The flow of funds into and out of India is regulated strictly by FEMA - Foreign Exchange Management and RBI guidelines
    For money getting into India from overseas, RBI has three approved modes
    1.IFS- International financial system platform of Universal post union via post offices
    2.RDA-Rupee Drawing Arrangement
    2.MTSS - Money transfer service scheme

    RDA is primarily used for inward transfer into India between two private/individual accounts. It is used sometimes for trade with a limit of Rs 15 lakhs.
    MTSS - is for personal transfers from abroad into India for family and for tourists coming into India.

    I don't know of an STP - straight through processing STP wherein overseas banks can send money to your Indian bank account ( unless its an NRI account)

    Receiving money via Paypal has two options Paypal for small business and Paypal for freelancers.
    The PayPal for small business, the charges depends on the volume of business conducted.
    A rough guideline is if you are the receiver of money from overseas, the charges are 4.4%+ 0.30 dollars as transaction charges. Then there are the conversion charges wherein the rough amount lost is 2.5%-3.5% when you transfer the money from the Paypal account to your Indian bank account.

    The other option is other sites like Payoneer.

    Receiving foreign funds attract the attention of the RBI and IT department, would suggest discussing with your Chartered accountant and the manager of the branch (where the overseas money would come in finally) to avoid any legal hassles.

  • Earlier PayPal was the standard method as direct deposit to bank was not streamlined. Now a days both the methods are in vogue.

    Whichever method you adopt please try to reduce your transactions. It means that you let the money remain with the site till it is significant say $ 100 and then only ask them to send to your PayPal account or directly to your bank so that you incurr the transaction charges only once over a period of say 15 days or 1 month.

    Knowledge is power.

  • PayPal is one of the established method in money payments and transfers and their commission or charges are reasonable (normally upto 2 % of the amount for each transaction).
    Banks are also doing this service but their charges are higher. Typically they charge $25 or more for each transaction.
    As regards the speed of transfer they take almost same time 1-2 days for money to come to your account.
    So in my opinion PayPal is a better choice.

    Thoughts exchanged is knowledge gained.

  • PayPal charges are low. Your question is also confusing. Is it the advertiser who accept payments only via PayPal or is it you who is confused to whether accept payments to PayPal?

    The first step is to set up a Business account to remove usage limitations and also get access to more transaction and additional features. Once you set up the business account you will have no limitations and transaction charges are for converting dollars to INR.

    Hackers never learns but always wins!

  • Accepting the money through bank is lot better because you get better currency conversion rate. You just have to do the documentation formality like purpose code and the declaration on the amount received.

    In case of the paypal payments you can see that they give you very low currency conversion amount which is lot lower than bank. Also they charge GST and their own transaction charges. So you get less money through paypal compared to bank transfer.

    Payoneer is another payment transfer which can be good enough for currency conversion and the bank transfer. They are much cheaper than the paypal. Also the bank charges and transfer can be good enough for the amount being sent.

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