A Beginners Guide to PayPal China
PayPal is one of the popular ways to send and receive money across countries. It has become popular with most of the online stores have PayPal as one of the default payment method. Having a PayPal account is easy as you can use your email id as a merchant id and use for financial transactions. However, the rules are different in different countries. In this article, we will explain how to setup and use PayPal in China.
Related: WeChat Pay guide for foreigners in China.
China and PayPal
Unlike many other countries, sending and receiving money out of China needs different process.
For Individual Account:
- Your Chinese name in Mandarin and Pinyin. Remember, you need to write the name in Chinese and Pinyin (which is Mandarin converted to English).
- Chinese identification card.
- Bankcard from Mainland China.
- Any credit card, you can use for vendor payments.
For Business Account:
- Legal business license.
- Legal representative’s name and ID card details.
As you can see, it is not possible for other country citizens to open PayPal account in China. In addition, there are also payment holds for China PayPal users for initial period which we will explain in later sections.
Remember, most of the sellers don’t even know what PayPal in China is. Unless, you have a reason we don’t recommend to use PayPal in China. Also, the website will be very slow and will not open most of the times. However, you can easily transfer money between your Chinese and overseas PayPal accounts to make the fund available in both the countries.
Creating PayPal Account in China
In this article, we will explain with individual account, you can convert the personal account anytime to business account. The process is similar to creating account in any other country except you should provide the name in Chinese. Go to the PayPal China site, scroll down to the bottom and change the language to English if you want.
Go back to top and click on the “Signup” button. Type your family name and given name in Chinese along with email address.
On the next screen, you to enter the Chinese ID card and verify the email address in order to confirm the account ownership.
After creating account, PayPal China sets initial limitations on your account. Though you can receive money from others, the limitations will keep your fund on the blocked pending account. You will not be able to transfer the fund to bank account or use the balance amount.
You need to keep the balance in the locked account for 21 days to prove your account is in good status before moving the fund to normal balance. If you want to remove this thresholding period, there are three requirements for PayPal China users before you have a free balance in your account.
- Have 10 financial transaction without any dispute.
- Transaction worth of $250.
- Wait for 60 days from the account opening.
Related: Alipay guide for foreigners in China.
Send and Receive Money
After login to your account, you can go to “Send & Request” section to request money from anyone. However, the received money will be sent to your pending balance that will be blocked for 21 days from the receipt. You can complete the above mentioned three requirements to start receiving the fund directly to your available balance.
The good part is that you can send money from your credit card without any limitations.
Adding Bankcard in PayPal China Account
There are two ways to connect a payment method to your PayPal China account. One is to use your credit or debit card and other is to connect your bank account.
You can use the connected credit or debit cards for online shopping and paying to vendors. However, as mentioned before, you will not find any vendor accepting PayPal in China. Therefore, it is not much useful compared to WeChat Pay or Alipay.
In order to transfer or withdraw the fund to your bank account, you need to connect the local mainland China bank account. Make sure to call and confirm with your bank that they will accept USD or any foreign payments and get the SWIFT code for the transfer. Enter the name in Pinyin and connect your bank account with PayPal.
Related: How to add PayPal in Weebly store?
PayPal China Transactions Fee
Processing fee in PayPal China is much higher than PayPal fees for other countries. You need to pay three types of transaction fee to PayPal China – actual transaction fee, fixed fee and withdrawal fee. Below is the transaction fee for USD transfer to PayPal China account. If you are sending money in other currencies, additional 2.5% fee will be deducted for currency conversion.
|Rate||Monthly Sales||Transaction Fee||Currency Conversion||Withdrawal Fee to China Bank|
|Standard||Up to $3,000||4.4% of transaction + $0.3 fixed||2.5%||$35|
|Discounted||$3,000 to $ 10,000||3.9% of transaction + $0.3 fixed||2.5%||$35|
|Discounted||$ 10,000 to $100,000||3.7% of transaction + $0.3 fixed||2.5%||$35|
|Discounted||More than $100,000||3.4% of transaction + $0.3 fixed||2.5%||$35|
You should apply separately for using discounted fees and PayPal China also allows you to withdraw the money to Hong Kong or USA bank accounts.
If you are a freelancer getting $100, you will finally get $60.3 in your bank account after all deductions. You may also lose money with the currency conversion from USD to RMB that is deducted by your bank.
|Transaction fee (4.4%)||-$4.4|
|Fixed fee ($0.3)||-$0.3|
|Bank withdrawal fee||-$35|
|Final amount transferred to bank||$60.3|
You can use the PayPal China account for direct payment from your credit card or sending money to other PayPal users in other countries. However, having PayPal China account will cost you heavily for transactions and withdrawal. In addition, you can only use the account on international platforms and there will be no vendors accepting PayPal in China. Recently, PayPal acquired one of the payment processing platforms GoPay in China. You need to wait and see how this can help PayPal China to establish their presence in China.