In a move to boost business from Indian merchants, PayPal has reduced its Foreign Inward Remittance Certificate (FIRC) from Rs 2000 to Rs 1000 per transaction for up to 20 transactions. For more than 20 transactions, bulk FIRC fees will be Rs 2000.
FIRC is a document that acts as a testimonial for all the inward remittances entering India. Most of the statutory authorities accept this document as proof that an individual or a business, such as a limited company, partnership firm, sole proprietorship firm and others, has received a payment in foreign currency from outside the country.
PayPal has been slowly stepping up its efforts in India. In March, it extended its partnership with online travel agency MakeMyTrip to facilitate hotel bookings in addition to airline tickets. It will be using an automated invoicing feature of PayPal for bookings where foreign customers will get the invoice via email and they can complete their payment.
Meanwhile in August, its digital money transfer service Xoom started offering instant transfer feature on high-value remittances.
Last year, it launched PayPal.me, a digital peer-to-peer payment service aimed at freelancers and small businesses selling products and services across borders. Merchants can set their own profiles and get a personalized URL for their business with their existing PayPal accounts. This URL will help merchants to call for a payment without giving out their bank account details and IFSC or SWIFT code.
Note that PayPal has reportedly applied for a wallet licence from the Reserve Bank of India (RBI). This move is significant considering that the draft guidelines where the RBI is mooting for wallets to now undertake cross-border inward remittances. At the moment, the company has a markup on foreign exchange transactions which varies from 2-4% which might discourage merchants from signing up. The wallet licence might allow the company to lower transaction costs for merchants to sell globally.