The digital payment landscape in Nepal has seen significant growth over the past two years, with a noticeable shift from traditional cash and cheque transactions to digital alternatives like Quick Response (QR) codes. According to the Payment Oversight Report by Nepal Rastra Bank, cheque transactions at banks dropped by 8.97% in the fiscal year 2022-23. In contrast, mobile banking transactions saw a staggering 60.19% rise from mid-June to mid-July compared to the same period last year. QR code payments also surged by 104.81% during the review period.
One of the driving factors behind this increase is the cost-effectiveness of digital transactions, which are significantly cheaper than processing cheques. The government of Nepal’s recent decision to refund 10% of the 13% value-added tax (VAT) on online payments has further incentivized digital adoption. Customers can receive this refund when making payments at bars, restaurants, hotels, motels, lodges, and guesthouses, with the operators required to credit the refund directly to their accounts.
-Sweta Singh (Kathmandu)