06 April 2022

Indian visitors to Nepal will no longer need to carry physical cash thanks to a new cross-border payment system based on interoperable and mobile first technology.

The National Payment Corporation of India (NPCI) and International Payments Limited (NIPL), the international arm of National Payments Corporation of India, have partnered with Gateway Payments Service and Manam Infotech to deploy a unified payment interface (UPI) in Nepal.

This means travellers can simply make payments by scanning quick response (QR) codes.

It is viewed as major step forward for Indians travelling north as there are restrictions on the use of high denomination IC notes in Nepal. The system is currently not on a reciprocal basis as Nepalis are not allowed to make payments through Bharat-QR while travelling to India.

The new system is expected to be introduced in May.

“We are all set to launch the system after three months,” Anu Maity Shakya, marketing head of Gateway Payment Service, told the Kathmandu Post.

The system will enable payments for larger digital goods and boost interoperable real-time person to person (P2P) and merchant payment transactions (P2M) in Nepal.

The UPI is a real-time payment system that provides person to person and person to merchant transactions simply, safely and securely in India.

The government move to ban the use of high denomination Indian currency notes in Nepal had drawn criticism particularly from the tourism industry because Indian bills were widely used in Nepal.

However, according to Nepal’s central bank, the system is currently not on a reciprocal basis and Nepalis are not allowed to make payments through Bharat-QR while travelling to India.

“We have sought permission to allow digital transactions for Nepalis while travelling to India as well. We are waiting for the response from Nepal’s central bank,” added Shakya.