Nepal witnesses significant digital transformation in payment systems amid the COVID pandemic

Nepal witnesses significant digital transformation in payment systems amid the COVID pandemic

KATHMANDU: Nepal has undergone substantial changes in its payment systems and mediums due to the COVID pandemic. The entire landscape of Nepali payments has shifted towards digital practices as banking services across the nation have embraced digital transactions. This shift has led to a considerable increase in cashless transactions, marking a significant milestone in the cashless business sector.

Previously, banking transactions during the post-COVID-19 period were primarily conducted through digital means such as mobile banking, mobile wallets, internet banking, QR payments, and Connect IPS.

The need to visit banks for cash deposits or withdrawals has diminished, emphasizing the growing importance of digital channels in both personal and business transactions. Various banks, including 20 commercial banks, 16 development banks, and 17 financial companies, play a crucial role in promoting digital transactions.

The Nepal Rastra Bank, recognizing the importance of digital payment system development post-COVID-19, has implemented the RTGS system. This system facilitates banking transactions of up to two million rupees through mobile banking.

Wallet companies have made the payment of general bills and government services more accessible, while Connect IPS allows transactions exceeding two million rupees and supports business-related payments, including tax settlements.

Jointly operated by Nepal Rastra Bank and banks and financial institutions, the NCHL has significantly contributed to enhancing digital services. The majority of banks and financial institutions in Nepal have adopted the F1Soft mobile banking technology.

Despite the digital transformation of Nepal’s payment system, challenges such as cyber threats, internet data-related privacy, consumer protection, and digital financial literacy persist. Nevertheless, Nepal is making remarkable progress towards a more digitized payment landscape, showcasing a 62% growth in global cashless business, surpassing the 82% growth rate in the Asia-Pacific region, as reported by the Nepal Rastra Bank.

Fiscal Nepal |
Friday January 12, 2024, 12:00:17 PM |

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