Nepal Rastra Bank (NRB) has abolished sub-agents providing payment services, directing that thousands of sub-agents, including various shops, transition to authorized representatives within three months. The move follows amendments to the Integrated Payment System Directive, 2023, which redefines agents as “authorized representatives.” Both agents and sub-agents must now align with this updated framework.

Currently, 26 payment service providers (PSPs) operate in Nepal. According to the NRB, PSPs bear full responsibility for payment services offered to customers by authorized representatives. The directive requires PSPs to evaluate the competence of authorized representatives before formalizing agreements. These agreements must not include exclusivity clauses preventing representatives from working with other PSPs.

Kiran Pandit, Acting Executive Director of the Payment Systems Department, stated, “Thousands of shops and others were functioning as sub-agents, but this role has now been revoked. All must register as agents or authorized representatives with PSPs to ensure uniformity.” Pandit added, “Sub-agents must transition to authorized representatives or have their agreements canceled within three months of the directive’s implementation.”

PSPs are required to report the details of converted representatives or those whose services have been discontinued to the Payment Systems Department of NRB. Authorized representatives will handle tasks such as depositing cash into customers’ wallets or prepaid cards, facilitating bill payments (e.g., water, electricity, internet), and enabling mobile recharges and government service fee payments. Representatives may also provide wallet balance and transaction details, update electronic Know Your Customer (KYC) information, and remotely onboard customers in compliance with prevailing laws.

Authorized representatives are mandated to use wallet accounts for service delivery and bank accounts for wallet fund deposits. No additional fees may be charged to service recipients for specified services. PSPs are required to organize orientation programs to train and raise awareness among authorized representatives.

The directive defines an “authorized representative” as an individual appointed by a PSP licensed by NRB. A “customer” refers to any individual or organization using wallets or prepaid cards issued by the PSP. These changes aim to standardize payment services and enhance security, efficiency, and compliance within the sector.