Nepal has taken a significant leap toward financial sovereignty with the launch of the second phase of national payment switch and domestic card scheme—NepalPay.
The initiative, led by Nepal Clearing House Ltd (NCHL), will end the existing reliance on international networks such as Visa and Mastercard for card payments.
Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari officially inaugurated the Nepal Pay card by making a point-of-sale (POS) payment using a new NepalPay card.
NCHL had signed an agreement with ACI Worldwide for the establishment and operation of National Payment Switch (NPS) that includes interoperability of card-based transactions (NPS National Card Switch or NPS-NCS) and the rollout of NepalPay domestic card scheme.
The introduction of the domestic card scheme is a milestone in Nepal’s financial journey as it ensures that transaction data remains within the country while enhancing security, affordability and efficiency.
So far, banks and financial institutions in Nepal have been dependent on international payment gateways for processing debit and credit card transactions. Such transactions incurred significant costs to banks in foreign currency which is ultimately passed on to consumers. With the introduction of NepalPay, the country can retain more of its financial resources, leading to a more self-sufficient and cost-effective banking environment.
One of the primary advantages of Nepal Pay is its ability to store customer transaction data within Nepal. This reduces the risk of external data breaches, providing enhanced security and greater control over financial transactions. Additionally, as the national payment switch charges lower routing fees, banks and financial institutions can pass on cost savings to customers.
“Payments processed through international providers used to incur additional fees, but with a domestically operated card, those expenses will be saved,” Governor Adhikari said during the inauguration ceremony.
NepalPay cards will function like the existing debit and credit cards issued by banks and financial institutions, allowing users to make transactions at ATMs and POS terminals. Banks and financial institutions interested in issuing NepalPay cards can do so by entering into agreements with NCHL.
Since November 2021,NCHL has been implementing the first phase of the national payment switch, enabling transactions through bank accounts, e-wallets, and quick response (QR) codes. The launch of Nepal Pay further strengthens this digital infrastructure, paving the way for a more streamlined financial system.
Several banks and financial institutions have already partnered with NCHL to issue NepalPay cards. These include Citizens Bank, Goodwill Finance Limited, Himalayan Bank, Machhapuchhre Bank, Muktinath Bikas Bank, NMB Bank, Prabhu Bank, Shangrila Development Bank, and Siddhartha Bank.
NCHL plans to introduce credit, prepaid and virtual cards in phases. The long-term vision includes integrating NepalPay with bank switches and exploring international expansion.
