The pandemic of Covid-19 hasn’t controlled yet.More than 5 million people got already infected from this lethal disease.As of now,340,383 deaths have been reported where as more than 2 million people have been recovered.In order to prevent and control this pandemic, people are embracing new ideas and technologies in their working styles. In the midst of this COVID-19 pandemic, e-commerce has been promoted all over the world. The pandemic has paved the way for the effective transmission of e-commerce in Nepal as well.
The 27 commercial banks, development banks and finance companies currently operating in Nepal have also started promoting electronic transactions. In recent days, electronic transactions have become more and more inevitable in order to prevent the transmission of the COVID-19. To make financial transactions easy, simple and transparent, the government and regulatory bodies are also encouraging financial transactions through digital platforms. Following the global outbreak of the Covid-19, the talk of such digital platforms has once again surfaced. The World Health Organization (WHO), experts and physicians have warned that coronavirus infections could increase with the use of physical notes, and the number of people transacting electronically through electronic means has escalated.
According to Nepal Clearing House Limited, the number of electronic transactions has increased during the lockdown imposed by the government to prevent the transmission of corona virus. Most of the banks and financial institutions in Nepal are affiliated to the NCH Ltd had deferred electronic transactions worth Rs. 35.60 billion in the second week of the lockdown. The details of the last two weeks are yet to come. The government had announced the strike from April 25.The NCH Ltd. had canceled transactions worth Rs. 18.60 billion in the first week of the lockdown alone. Compared to the first week, the number of electronic transactions has almost doubled.
The company currently operates five national payment systems including NHCL-ECC, NCHL-IPS, Connect IPS, Connect RTGS and NPI. Almost all banks and financial institutions including Nepal Rastra Bank are affiliated to it. Among the existing systems, Electronic Check Clearing (NCHL-ECC) and Inter-Bank Payment System (NCHL-IPS) have been provided for clearing from today.
According to Nileshman Pradhan, Chief Executive Officer of NHCL-ECC, checks regularly deposited at NHCL-ECC till 1.30 pm and payment orders received at NCHL-IPS till 1 pm will be refunded on the same day. Transactions in the system after that deadline will be rescheduled the next day.
NCHL’s Connect IPS allows transactions to be made 24 hours a day through its mobile application, website or mobile and internet banking of financial institutions. Even in the face of long-running lockdowns, private service providers have resorted to providing mobile wallets and bank-based internet, mobile and card-based digital banking to provide cashless payment services to the general public. The government is also explaining that the attraction of consumers in digital transactions has increased as financial transactions can be done even from home. In a meeting with officials of the Nepal Chamber of Commerce, he expressed satisfaction over the increase in electronic transactions.
He said, “We have started doing e-governance, e-commerce, online video conferencing. Banking and customs have also been paved to move forward electronically. ” Stating that Corona has also helped in expanding the use of technology, the Finance Minister stressed on the need to further expand such system. A total of 22 digital ‘platforms’ with nine payment services and 13 payment service providers are currently operating in Nepal with permission from the NRB. In addition, there is a structure of digital banking based on internet, mobile and cards being provided by banks and financial institutions. The main task of all of them is to develop, expand and further promote the digital platform by providing cashless payment services.
According to the latest statistics of Nepal Rastra Bank, A, B and C class banks and financial institutions have about 31.12 million accounts. Of them, about 9.8 million use mobile banking services, about 9.69 million use internet banking services and 7.215 million use debit cards.
With the unprecedented development of science and technology and the introduction of new uses in the field of information technology, it has succeeded not only in establishing contact between individuals, but also in providing essential financial services even in such a difficult situation. According to various international financial reports, about 60 percent of the total population of Nepal has no access to banking.
The government has requested all to give priority to electronic transactions by reducing congestion during the lockdown period. Only customers who are unable to transact electronically are requested to come to banks and financial institutions. According to Bhuwan Dahal, Chief Executive Officer of Sanima Bank and Chairman of Nepal Bankers Association, the customers have also followed the request of the government and banks and financial institutions.
He said that the ATM card of any bank has been used for the purpose of reducing congestion in banks and financial institutions.
Promoting digital payments is equally necessary to save the state the money being spent on printing notes.
Digital payments are equally important for the state to make financial transactions transparent. According to the NRB, there are more than five trillion rupees of physical notes available in the Nepali market. Promoting digital payments is equally necessary to save the state the money being spent on printing notes. Clients themselves are freed from the obligation to go to the branches of banks and financial institutions for financial services.
It saves both consumer time and money. Therefore, digital industry is a modern platform of economic transactions with equal needs from the state to the general consumer. While protecting against possible corona infections is temporary, it must now be acknowledged that digital payments provide stability to the country’s economic system.
Digital payment mobile wallets are now the first choice for the purpose of paying utility payment services such as water, electricity,school fees,internet and mobile and TV recharges for households, organizations and offices. In addition, it has been used in various types of payment services including fuel (petrol, diesel), shopping, hotel and restaurant bill payment, installments to be paid to banks and financial institutions, insurance and fees to be paid to various offices.
Considering the scope of payment services, it is almost certain that digital payments will expand in a very wide area. But for this, the service providers have to make continuous efforts. Lockdown and digital payments There is a saying in Nepali, ‘Business is the right bride’. The digital industry, which has been shifting to the left, is providing services to the financial sector, which falls under the essential sector in the event of a shutdown.
We have the opportunity to use these services as the structure of digital payments is within the geography of the state. According to the BBC, about a quarter of the world’s population is now confined to their homes with the aim of breaking the physical human network (chain break) to prevent possible transmission of the COVID-19. The total population of Nepal now falls within that. In such cases, services can be purchased using digital means to make daily life entertaining and comfortable.
One of the leading companies in Nepal is IME Pay. With a network of about 25,000 agent outlets, IME Pay is a digital financial services provider brand under the IME Group. IME Digital has obtained permission to provide mobile wallet service through telecommunication network as per Nepal Rastra Bank’s Payment and Discount Regulations-2072 BS and IME Digital has been established as the first payment service provider in the country to get such permission.
According to Bikas Nahata, chief executive officer of IME Pay, the number of customers transacting with him has quadrupled since the lockdown. He said that while other service providers did not pay interest on the money kept in the wallet, IME paid up to four percent interest to its customers. Such an arrangement has given additional convenience to the customer. Chief Executive Officer Nahata’s arrangement of paying interest has also further motivated the customers. Stating that IME Pay is also planning to add some more services, he said that the number of electronic transactions has increased significantly during the current lockdown period.
IME Digital provides mobile wallet services under the ‘IME Pay’ brand. It supports everything from simple person-to-person money transfers to QR payments at various online and on-the-go stores, mobile recharges and various household and office bills.
Nahata said that IME Digital aims to contribute to the financial inclusion of Nepal by providing access to financial services to the general public, including Nepalese who are deprived of banking facilities and have low banking facilities. With over a million apps downloaded, IME Pay’s main feature is a leading brand in itself and an already expanded service network across the country. Since millions of service recipients in the remittance sector consider IME as a reliable brand, the major credit for institutionalizing the overall remittance industry of the country goes to IME. Apart from IME Pay, there are other digital trading institutions in Nepal including E-sewa and Prabhu Pay.
Increasing access seems to be the biggest challenge for these this crawling industries. Utility payments, which have very low profits, make it difficult for the industry to survive. Only when the areas of service it provides are added , the industry will continue to grow. Only when such companies can be integrated into many other types of services such as social security allowances provided by the government can the challenge of sustainability of the industry be solved along with the diversification of digital services.
Executive Director of Nepal Rastra Bank Revati Prasad Nepal says that the volume of electronic transactions has increased in recent days. He said that the amount of electronic transactions among consumers has increased even though the latest details have not been received as banks and financial institutions provide details every 15 days. The number of people doing electronic transactions to buy groceries and other daily necessities has increased. The Central Bank has also assigned Executive Director Nepal to oversee the use of mobile, internet banking and credit cards, the use of ATM services and all types of digital banking transactions.
In recent days, Nepal Electricity Authority, Nepal Water Supply Corporation, Nepal Food Trade and Management Company have also given patronage to electronic transactions. Customers can easily avail mobile recharge, top up, electricity, drinking water, school bill payment, insurance payment, airline, bus ticket, cinema ticket purchase etc.
According to the Nepal Electricity Authority, the number of customers paying their electricity bills online has also increased. NEA had made arrangements to make electronic payment from Shrawan 2075 BS. In Shrawan 2075 BS, one lakh 64 thousand 521 customers took such facility.But by last Ashad, it had increased to two lakh 26 thousand 825. As the government and Nepal Rastra Bank are also in the forefront of further promoting electronic transactions as per the demand of the time, the number of transactions in physical currency is expected to decrease in the coming days. However, there is a need to pay special attention to electronic security as it is important to increase the trust of electronic traders.