NRB has said that it can direct payment companies having cross-holding structures of shares to go for a mandatory merger or acquisition. According to the central bank, if directors of payment companies own more than 10 percent of shares in other payment companies, such entities can be directed to merge or acquire each other.
Guru Prasad Paudel, Chief of Payment Systems Department of NRB said that the amendment of the bylaw has opened the way for the merger of payment-related companies. With this, PSOs such as Nepal Clearing House Limited (NCHL), Nepal Electronic Payment System (NEPS), Smart Choice Technologies, and Nepal Payment Solutions can merge with each other. Similarly, PSPs like Esewa, Khalti, and IME Pay can go for the merger. Currently, there are 10 PSOs and 27 PSPs currently operating in Nepal. Of the 10 PSOs, three are international companies. Visa Worldwide of Singapore, Mastercard of Singapore, and Union Pay International of China have been operating as PSOs. NRB officials say the policy of merger has been brought in as the number of PSOs and PSPs has increased but their business has not grown as expected. In a bid to consolidate the payment industry, the central bank has already increased the paid-up capital of entities involved in the digital payment business. Issuing a new licensing policy in the second week of January, the central bank increased the paid-up capital for payment service providers (PSPs) and payment system operators (PSOs). As per the new arrangement, the paid-up capital of PSPs operating devices other than payment cards has been fixed at Rs 50 million. The paid-up capital of PSPs operating payment cards and other devices has been fixed at Rs 250 million. Similarly, the paid-up capital of PSOs has been fixed at Rs 400 million, while PSOs handling payment transactions outside Nepal through payment instruments issued in the country have to raise their paid-up capital to Rs 800 million. NRB has set a deadline of 2028 for the existing PSPs and PSOs to meet the new paid-up capital requirement. The companies that have already obtained licenses from the central bank, have to maintain the paid-up capital as prescribed by the NRB by mid-July 2028. Digital payment in Nepal has grown multifold, particularly after the start of the Covid-19 pandemic in early 2020. According to the latest NRB statistics, Nepal has now more than 17.56 million wallet users. Similarly, there are 2.04 million mobile banking users in the country. NRB data shows 368,764 new customers have been added to mobile banking in the last one month. The NRB statistics show a total of 3.05 million mobile banking customers have been added in the last one year, i.e., from mid-April 2022 to mid-April 2023. The number of digital wallet users has increased by 5.85 million. According to NRB, transactions worth Rs 207.45 billion were done through mobile banking in the month of Chaitra (mid-March to mid-April 2023). Similarly, transactions worth Rs 19.92 billion were done through digital wallets.
