1. Access to Payment Systems

• Wallet Users: There was a significant growth in wallet users, increasing to 24.26 million in Bhadra 2081, up from 23.46 million in Asar 2081 (Mid-July to Mid-August 2024). This highlights the growing reliance on mobile wallets for daily transactions.
• Debit and Credit Card Usage: Debit card users slightly decreased from 12.99 million in Asar 2081 to 13.09 million in Bhadra 2081. Credit card users, however, saw a modest increase, reaching 293,618 users compared to 290,736 in the previous month.
• Mobile and Internet Banking: Mobile banking customers showed consistent growth, with users reaching 25.21 million, marking a steady increase from 24.96 million in Asar 2081. Internet banking users also grew marginally to 1.96 million, reflecting increasing digital banking adoption.
• Payment Service Providers (PSPs): The number of PSPs and Payment System Operators (PSOs) remained consistent with no new entries during this period, indicating a stable market for digital financial services.

2. Usage of Payment Systems

The report indicates a robust expansion in the use of various digital payment systems, both in terms of the number of transactions and transaction value.

• Mobile Banking: The most used digital payment platform continues to be mobile banking, recording 47.46 million transactions in Bhadra 2081, with a total transaction value of NPR 377.63 billion. This is a considerable increase from 43.87 million transactions in Asar 2081.
• Wallet Transactions: Transactions through wallets reached 32.01 million, with a transaction volume of NPR 40.30 billion, slightly up from 31.44 million in the previous month. This reflects the increasing use of mobile wallets for small, everyday payments.
• ATM Cash Withdrawals: Despite the growing shift towards digital transactions, ATM withdrawals remained high, with 11.28 million transactions in Bhadra 2081, valued at NPR 87.61 billion.
• E-Commerce Growth: E-commerce transactions reached 150,292, with a total value of NPR 1.23 billion. This shows steady growth from the previous month's 145,977 transactions, underscoring the increasing importance of online shopping in Nepal's economy.
• connectIPS and IPS Transactions: Transactions via connectIPS, an interbank payment system, continued to grow, recording NPR 531.47 billion, a noticeable increase from NPR 498.43 billion in Asar. IPS also saw increased transaction value, reaching NPR 204.57 billion.

3. Key Observations and Trends

• Strong Mobile Banking and Wallet Adoption: The consistent growth in mobile banking and wallet transactions suggests that consumers in Nepal are rapidly moving towards digital platforms for convenience and efficiency.

• Cash Still Plays a Role: Despite the rise in digital transactions, cash withdrawals through ATMs remain significant, showing that cash is still a preferred method for many in the population.

• E-Commerce on the Rise: The increase in e-commerce transactions reflects a growing trend towards online shopping and digital payments, though it still represents a small portion of overall transactions.

• Stability in Payment Service Providers: The number of PSPs and PSOs remained stable, indicating a mature digital payment ecosystem with little churn.

Conclusion

Nepal’s digital payment ecosystem is growing steadily, driven by the increasing adoption of mobile banking, wallets, and e-commerce platforms. While digital transactions are on the rise, traditional cash-based transactions through ATMs remain significant, reflecting the hybrid nature of the country’s payment landscape. The future likely holds more growth in digital transactions as infrastructure and user familiarity with these systems improve.

This month’s data reflects a healthy and evolving payments ecosystem in Nepal, with digital platforms making inroads while cash continues to play a substantial role in the overall economy.

Data Source: Nepal Rastra Bank