Nepal-India Reach Agreement for Cross-Border Digital Payment

An agreement has been reached between Nepal and India for a cross-border digital payment system between the two countries. It will see the latter’s Unified Payments Interface (UPI) implementation that will help users pay by scanning QR codes. PM Pushpa Kamal Dahal “Prachanda” and his counterpart PM Narendra Modi signed the bilateral cooperation for digital payment in his visit to India, in 2080.

The agreement allows the use of QR scans and digital wallets to make payments. It facilitates Nepali citizens with digital payments in India while Indian citizens can also pay digitally by scanning QR through digital wallets and mobile banking in Nepal.

Nileshman Singh Pradhan, Chief Executive Officer (CEO) of Nepal Clearing House Limited (NCHL), the operator of the government payment system on behalf of Nepal, and Ritesh Shukla, CEO of National Payment Corporation of India (NPCI) on behalf of India, exchanged the agreement with each other.

After the implementation of the agreement, digital payments can be initiated in both countries through NCHL in Nepal and NPCI-affiliated banks and financial institutions and payment platforms in India.

Prior to this, only a card payment facility was in place for the two neighboring South Asian countries.

Easier payment for citizens of both Nepal and India

Speaking on the occasion, Nepal’s PM Prachanda said that this agreement will make it easier for businessmen, students, tourists, and pilgrims from both Nepal and India to make necessary cross-border payments.

Nepal Rastra Bank and the State Bank of India could also begin discussions to implement this landmark cross-country deal.

Already, people from both countries can use cards to pay however, it is not possible to pay with QR codes. The UPI interface is being brought to address this shortcoming. With this, the users of India and Nepal will have the ability of digital payments via digital wallets and mobile banking apps with QR scans.

Also read: Digital Wallets Can Merge as NRB Clears The Way for PSPs and PSOs

Process ongoing for a year

Back in June 2022, Nepali enterprise Gateway Payments Service Pvt. Ltd. and Manam Infotech Private Limited partnered with NPCI International Payment Limited (NIPL) to bring India’s revolutionary Unified Payment Interface. This alliance will initiate the formation of an interoperability and Mobile-first technology-based UPI Nepal allowing users to perform transactions through the banking and digital wallets of Nepali and Indian mobile payment vendors.

This also makes Nepal the first country to adopt India’s massively popular UPI in mobile payment platforms.

The three companies will work closely to deploy UPI in Nepal. As per the news, the first phase of services will roll out in the next three months. Nepali users will get all the functions and features in UPI as they are currently available in India.

Meanwhile, Gateway Payment will be responsible to maintain the UPI system in Nepal. It will head the operations as an Authorized Payment System Operator by Nepal Rastra Bank. 

What Does the Cross-Border Digital Payment Between Nepal and India Bring for Us?

It will enable real-time Person to Person (P2P) and merchant payments between Nepali and Indian mobile payment platforms. It means Nepalese can use eSewa, Khalti, or banking apps to transfer money or pay for Indian services in India.

Also, popular Indian platforms like Paytm, PhonePe, Google Pay, etc will allow transferring money to any bank or digital wallet in Nepal instantly. Indian users could pay with those apps or scan FonePay QR or other codes when they are in Nepal.

What has been said about the Nepal-India cross-border digital payment agreement?

Earlier, Rajesh Prasad Manandhar, CEO of GPS hailed the cross-border transaction facility as significant to driving Nepal’s digital economy. He said, “The same UPI service has created a significant positive impact in India in terms of the country’s digital payment transformation. We expect UPI in Nepal would play a pivotal role in transforming the digital economy of the country and dreams of building a less-cash society.”

Likewise, Ritesh Shukla, CEO of NIPL shared similar enthusiasm. He then pitched the agreement as a step up for NIPL’s broader ambitions. He expressed his delight in the partnership with Nepali companies.

“We are excited about this partnership, which will enable consumers within Nepal to transact swiftly using a state-of-the-art UPI platform and deliver a seamless user experience. We are confident that this initiative will stand as a testimony to NIPL’s technological capabilities and vision of scaling our unique offerings globally,” Shukla added. 

Naga Babu Ramineni, Director of Manam extended his own delightful sentiments. He said, “Manam has always been part of major digital transformation across the various regions of the world, we believe this partnership will eliminate all the 2. barriers of payment transformation within Nepal and across the border thereby transforming the regional economy. Manam Infotech will provide the UPI technology and operations support working closely with GPS in Nepal.

Another Milestone For Digital Economy

Currently, Nepal has seen a series of interoperability among domestic mobile payment solutions. Khalti has joined FonePay’s network. Prabhu has also followed. Federal Bank NRB has released a directive to implement interoperability between all the mobile payment vendors in the next 6 months.

Now, the transaction interoperability between Nepali and Indian mobile payment platforms will be another milestone for a cashless economy.

Implementation of UPI Nepal will greatly influence the digital economy and help realize the government’s Digital Nepal framework.

Are you eager for the cross-border Nepal-India transaction initiative? Do share how you feel about this cooperation between the two states in our comments below.