Had enough of transaction fees? Send money from your credit card through PayPal

Payment Options

PayPal is a very common payment method for ebay users. Accepted by Japanese e-commerce giant “Rakuten” and many other online shops, the number of PayPal users in Japan is rapidly increasing. It also benefits online sellers with simple and easy transactions. Originally, PayPal has been used as an online payment method. But other than making online payment or receipt, it also can be used as a method to transfer funds. One thing to remember is, the way to top up your PayPal account differs depending on each country’s regulations. This column will introduce how to transfer money to the third party through PayPal in Japan.


About PayPal

PayPal is an American company founded in 1998 supporting online money transfers. Users transfer funds between each other’s PayPal accounts in principle. PayPal is used in 190 counties and users can choose from 21 currencies. Opening an account is cost free, and you can choose from individual account and business account. To open an individual account, just enter your email address, name, address and phone number.
Service of PayPal complies with financial laws of each country. Principally, PayPal allows its users to transfer funds between their PayPal accounts by connecting their local or US credit card and bank account.

About PayPal account opened on Japanese site

In some countries, users can top up their PayPal account balance from linked bank account or credit card. However, users who opened their accounts on Japanese site can only increase their account balance by receiving funds from a third person. They can transfer funds from PayPal account to their linked bank account. Also, they can transfer money from their PayPal account or linked credit card to other’s PayPal account.


Transfer money from your credit card via PayPal

With PayPal, users can transfer money between their accounts. You probably have no money in your account at the beginning if you opened the account on Japanese site, as your account balance cannot be charged from bank account or credit card. But once you link your credit card is linked to the PayPal account, all the amounts you have paid will be debited to your credit card account of your PayPal balance is zero.

Link your credit card

As mentioned earlier, your only money source to pay via PayPal is your credit card if your PayPal balance is zero. Therefore, you need to link your credit card to PayPal account first of all.

  1. Click “Wallet” on top, then click “Link a card”
  2. Fill in all boxes and click “Link card” at the bottom

How to transfer money

Once your card has been linked, you are read to transfer money. Check the following things before you start transferring.

  • Whether a payee has a PayPal account
  • Payee’s email address registered to PayPal

Then you can transfer fund via PayPal.

  1. Click “Send and request” on top, then click “Pay for goods or services”
  2. Enter Payee’s email address
  3. Choose currency from USD or JPY, enter the amount to pay and currency. Or choose currency and amount to be received, then choose payer’s currency. Click “Continue”
  4. Choose payment method from PayPal balance or credit card. If you have no PayPal balance, only credit card is available
  5. Click “Send money now”

※Payees can issue invoices to Payers by PayPal account. Online shoppers normally make a payment after they receive invoices from shops. But if both parties have PayPal account, they can transfer money between accounts without invoices.


About transaction fees

Funds transfers between PayPal accounts is free of charge. But if you are transferring money in foreign currency by using PayPal exchange rate, the rate includes foreign exchange fee. If you are transferring money in Japanese yen, there is no exchange fees thus no transaction fee is charged at all. In this way, it is cheaper than transferring money from your bank account. Only essential condition is, both parties must have PayPal account.


Bye bye bank fees!

While Japanese society is still rather cash-basis, but more people are using online payment than before. Naturally, more Japanese companies are accepting PayPal payments and the number of PayPal users in Japan keeps increasing. While PayPal’s services were originally developed to exercise online payments, they also allow funds transfer between users without any sale and purchase. Notably, there is no transaction fees charged on funds transfers in Japanese yen. It is worth using as an alternative of bank transfer.


Related Article:
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Read this before your trip to Japan! How to use foreign credit cards at Japanese ATMs
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How to transfer funds to Japan other than bank transfer
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あきらことほ Kotoho Akira

Living outside Japan for a good many years, I often rediscover nice little things about this country every time I return here. I would be more than happy if this column may help you find your "nice little things about Japan"!

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