Nepalis Set to Scan and Pay in India from 2025, Revolutionizing Cross-Border Digital Payments
Kathmandu, November 13, 2024
Nepali consumers will soon be able to make QR code-based payments in India, marking a significant milestone in cross-border digital transactions. According to Fonepay, Nepal’s largest payment network, the service is expected to launch at the beginning of 2025, pending final approval from Indian authorities.
“We have completed all preparations from our end. India is currently making some modifications to its payment system. Once they provide the green signal, we’ll be ready to roll out,” said Paras Kunwar, Chief Operating Officer of Fonepay.
This development follows a historic agreement signed in September 2023 between Fonepay Payment Service Ltd and NPCI International Payments Ltd (NIPL), the global arm of India’s National Payments Corporation. The partnership, unveiled at the Global Fintech Fest 2023, aims to introduce the first-ever QR code payment system between Nepal and India.
Growing Adoption of QR Code Payments
QR code payments have seen widespread adoption among Indian tourists visiting Nepal. Since mid-August, the transaction value surged to NPR 61.39 billion, a sharp increase from NPR 36.21 billion during the same period last year. Indian tourists are averaging daily QR payments of NPR 6 million, which rises to NPR 8 million on weekends.
The system’s popularity is fueled by the convenience of cashless transactions, especially since Nepal has banned Indian currency notes above INR 100 denominations.
New Opportunities for Cross-Border Transactions
With India aiming to finalize anti-money laundering checks and fee structures by December 2024, Fonepay is optimistic about a timely launch. Nepal’s central bank has already set transaction limits for cross-border payments, capping daily transactions at INR 100,000.
Fonepay is also expanding its horizons, negotiating agreements with Chinese payment platforms like Alipay+ and UnionPay. Once approved, Chinese nationals will be able to use QR codes in Nepal in the initial phase, with plans to allow Nepali users to pay in China in subsequent stages.
Beyond India and China, Fonepay is exploring partnerships with South Korea, Singapore, Thailand, and other Southeast Asian countries to facilitate QR payments for tourists.
Digital Payment Boom in Nepal
Nepal has experienced rapid digital transformation over the past decade. Smartphone penetration now stands at 72.94%, with 4G/LTE services covering 739 out of 753 local units across the country. Internet costs have dropped significantly, from $2.25 per gigabyte in 2019 to just $0.46 in 2023.
The digital payment ecosystem has expanded, with innovations like QR codes, virtual cards, and NFC-based contactless cards becoming increasingly popular. The introduction of the Retail Payment Switch (RPS) and the ongoing development of the National Payment Switch (NPS) promise further advancements in the payment landscape.
Bridging the Digital Divide
Despite these advancements, challenges remain. Around 50% of adults in rural areas and 40% in urban areas still lack access to financial institutions. However, the narrowing gender and rural digital divides signal significant progress in digital inclusion.
As Nepal gears up to implement its QR code payment system with India, the initiative is expected to enhance tourism, streamline transactions, and further integrate the economies of the two nations.
(Slightly abridged: kathmandupost.com)
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