The agreement between Nepal Clearing House Limited (NCHL) and the National Payments Corporation of India (NPCI) to enable digital payments between the two countries is a significant development that has the potential to ease cross-border transactions and boost tourism and trade. The agreement allows authorized digital payment apps from both Nepal and India to operate seamlessly, enabling Indian tourists to make direct payments in Nepal using their Indian wallets, and Nepalis to do the same in India.
This initiative is expected to make spending in Nepal more convenient for Indian tourists, as they can use popular Indian payment apps such as BharatPe, PhonePe, Google Pay, and Paytm. Similarly, Nepalis can use apps like connectIPS, Khalti, eSewa, IME Pay to make digital payments at merchants in India using Nepal's Unified Payment Interface and vice versa. This move will reduce the hassle of carrying cash and cut down transaction costs for individuals traveling between the two countries.
While the agreement is a positive step towards greater financial inclusion and digital connectivity between Nepal and India, there are still some logistical hurdles to overcome. Currency conversion, dissimilar payment infrastructure, and regulatory differences need to be addressed for smooth cross-border digital payments. However, officials are hopeful that these challenges can be resolved within months.
The agreement will particularly benefit Nepalis traveling to India for purposes such as medical treatment, education, and business, as well as Indian citizens involved in cross-border trade. By facilitating digital payments, it opens up opportunities for greater economic integration and commerce between the two nations.
However, some critics argue that a broader strategy involving multiple partners will be necessary for Nepal to fully leverage the potential of the digital payments ecosystem. Nonetheless, the agreement between NCHL and NPCI represents a significant achievement and reflects the immense potential within Nepal's thriving fintech sector.
Overall, this development is a positive step towards enhancing financial connectivity and ease of transactions between Nepal and India, which can have a significant impact on tourism, trade, and economic integration between the two countries.