Digital wallets can now merge. Nepal Rastra Bank has paved the way for mobile payment vendors seeking a merger or acquisition with the first amendment to the Payment and Settlement Bylaw, 2077. With the provision coming into place, companies who wish to combine will be able to proceed lawfully.
The revised bylaw adds one provision which holds that organizations that have received a license to perform payment activities can merge/merge or acquire each other. It also mentions that only payment system operators (PSOs) and payment service providers (PSPs) of the same nature can merge.
In order to merge or acquire organizations, the board of directors should get the authorization by passing the related resolution in the annual general meeting or special general meeting. NRB stipulates that the inclusive transactions should be completed within 30 days of receiving the final approval of the merger.
For the unversed, PSOs are companies like FonePay, SmartChoice Technologies, and Nepal Clearing Houses which provide payment processing services. ESewa, Khalti, IME Pay, Namaste Pay, Hamro Pay, etc. are examples of PSPs that provide direct payment services. NRB now has enabled such companies to merge and operate their services with the addition of new provisions.
Also read: NRB increases the limit of digital payment in Nepal
Digital wallets can merge and unmerge
But not just that willing digital wallets can merge, they can undo the combination as well. If a company provides a reason for the cancelation, NRB can authorize it as well. This can happen even after the process for the merger goes ahead.
However, the bank mentions that if the organization does not conduct the integrated payment within 30 days of receiving the approval of the merger or does not submit the application for final approval by the specified date after receiving the theoretical agreement, the bank will take action according to the Payment and Settlement Act, 2075.
After a theoretical agreement for a merger, companies must reach an agreement clearly stating the companies’ names, addresses, working areas, etc. Likewise, they must also determine the name of the company after the takeover completes. Check out: Inter-Wallet Transfer Soon as NRB Calls for Interoperability
The law also adds that public wallet companies that have issued an IPO must allocate a 20% share to the public after three years of operation.
There are 10 PSOs and 27 PSPs operating in Nepal.
