This is how digital payments are increasing in Nepal

Experts say that Covid-19 epidemic have led to increasing social distance and increased use of online services.

Government officials, on the other hand, claim that Nepal has made significant strides in digital business due to its long-established environment.

According to Bhuwan Kandel, Executive Director of the Payment System Department of Nepal Rastriya Bank, there has been an increase of up to 400 percent in any of the various payment methods from July 2020 to last April.

He said that significant progress has been made in the field of digital payment through QR code in recent times.

Continuous uphill

According to Kandel, the QR code payments have increased from Rs 500 million to Rs 600 million in December last year and have recently reached over Rs 2.5 billion per month.

“There has been a huge increase in other devices as well,” he said.

The government says there has also been significant progress in QR and RTGS (Real Time Gross Settlement) for retail payments.

NRB data shows that RTGS had a turnover of over Rs 21 trillion in April alone. That figure was 1.1 trillion in November and 1.3 trillion in November.

In the payment system, most transactions are done through RTGS, while retail transactions involve wallet, QR code and card payments, officials said.

“After the month of Shravan 2077 BS, electronic payments seem to have taken a big leap,” said Kandel.

How is the situation ?

According to the NRB data for the month of April, there are 10 payment system operators PSOs and 28 payment service providers in Nepal.

As of April, there are 4,302 ATMs across the country, with more than 8.6 million debit cards and 187,311 credit cards.

The number of mobile banking users is 13,825,814 while the number of internet banking customers is 1,141,783.

Connect IPS has 438,180 users.

Looking at the statistics of the month of April, more than 10 billion transactions have been done through wallet 10,743,511 times.

More than Rs 58 billion has been withdrawn from ATMs.

Officials say the electronic payment system is moving forward because it is based on technology and is market-driven.

According to Kandal, utility payments (such as electricity bills etc.) attract the most customers.

There are activities like buying electricity tariff or plane ticket through wallet and mobile banking.

In addition, the Connect IPS system is widely used to send money to each other’s accounts.

“Different systems have different trends. Credit cards and debit cards are running on POS machines, while contactless cards are also slowly coming in. The use of wallets seems to be more prevalent in utility payments,” he said.


Although digital payments are expanding widely in urban areas, the pace is slow in rural areas, experts say.

Former Finance Secretary Yuvaraj Bhusal says that this system has not been developed as a reliable medium outside the urban areas.

“The Nepal Bankers’ Association, the concerned bodies of the Ministry of Finance and the private sector should promote it,” Bhusal said.

Apart from that, access to internet service has also increased the limitations, says Bhusal.

He says users are still unsure whether their money is safe when shopping with a QR code.

NRB has stated that it is continuously working on the system and network expansion required for the expansion of digital services even though it does not have exact data on the number of transactions in which sectors.

“It is self-evident that there will be more (business) in cities including Kathmandu and less in rural areas,” Kandel said.

Is it safe?

Although the proportion of digital payments is increasing in Nepal, experts say that much attention should be paid to privacy and security.

It is said that the proportion of people who are knowledgeable about technology is less than that of developed countries and access to this technology can be established even in less literate population.

“Even in financial transactions, people from Romania to Nigeria have been stealing ATM PIN codes and withdrawing money from them. In the past, banks have also been using fake signatures to withdraw cash,” said Keshav Acharya, an economist.

“So the security of the business is one thing. The other thing is the security of the data, the statistics or the data.”

He also pointed out that despite the flourishing of e-commerce, the trend of goods being displayed on the website being different when it arrives at home and refusing to take back goods is also a matter of concern in terms of digital payments.

He said that e-commerce is not inclusive in the case of Nepal as those who can use it are moving forward and those who cannot are moving backwards.

“Women, people from rural areas, farmers have not been included. So the state should be able to take measures to take electronic business to the villages,” he said.

Kandel said the central bank has instructed payment service providers to use world-class software and update and test it from time to time.

But he argues that the general public should be more vigilant about digital payments.

“At least the account number, the pin code was not made available to others. And don’t get me wrong in the messages. We are also working to spread this knowledge,” he said.

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