Access to Payment Systems: Infrastructure Overview

The infrastructure supporting payment systems in Nepal remained largely stable between Chaitra 2081 and Baisakh 2082, with minor changes in specific areas:

• Payment System Operators (PSOs) and Payment Service Providers (PSPs): Both remained constant at 9 PSOs and 25 PSPs (excluding Banks and Financial Institutions, BFIs). This stability indicates a mature regulatory environment for non-BFI operators.
• PSP Agents: A slight increase from 422,316 to 424,978 agents reflects ongoing efforts to expand the reach of payment services, particularly in underserved areas.
• Wallet Users: Grew from 26.31 million to 26.73 million, a 1.6% increase, signaling continued adoption of digital wallets among Nepalese consumers.
• ATM Machines: A marginal increase from 5,262 to 5,266 terminals suggests steady but slow growth in physical banking infrastructure.
• Cards:
  • Debit Cards: Declined slightly from 13.59 million to 13.53 million (-0.4%), possibly due to a shift toward digital alternatives.
  • Credit Cards: Decreased from 313,223 to 306,793 (-2.1%), indicating cautious credit adoption.
  • Prepaid Cards: Rose from 237,107 to 240,587 (+1.5%), likely driven by PSP-issued cards for specific use cases.
• Mobile Banking Customers: Increased from 27.01 million to 27.26 million (+0.9%), reflecting growing reliance on mobile platforms.
• Internet Banking Customers: Saw a significant jump from 2.17 million to 2.42 million (+11.5%), indicating increased comfort with online banking.
• Branchless Banking: Declined slightly from 974 to 951 centers (-2.4%), possibly due to consolidation or a shift to digital channels.
• ConnectIPS Users: Grew from 1.40 million to 1.41 million (+0.8%), showing steady adoption of real-time payment systems.
• RTGS and ECC/IPS Members: Remained unchanged at 44 RTGS participants, 54 ECC members, and 137 IPS members, indicating a stable institutional framework.

Usage of Payment Systems: Transaction Numbers

Transaction volumes provide a window into consumer behavior and the popularity of various payment methods:

• RTGS: Declined from 76,318 to 71,526 transactions (-6.3%), possibly due to fewer high-value transactions in Baisakh.
• ATM-Cash Withdrawal: Increased from 11.10 million to 11.31 million (+1.9%), showing sustained reliance on cash.
• ECC: Dropped from 1.11 million to 1.09 million (-1.8%), indicating a slight decline in cheque-based transactions.
• IPS: Saw a significant decrease from 3.34 million to 2.50 million (-25.1%), possibly due to a shift to faster payment systems.
• Debit Cards: Rose from 11.92 million to 12.27 million (+2.9%), reflecting growing card-based spending.
• Credit Cards: Increased from 277,625 to 288,839 (+4.0%), showing modest growth in credit usage.
• Prepaid Cards: Decreased from 141,752 to 134,528 (-5.1%), possibly due to seasonal variations.
• Internet Banking: Grew from 435,619 to 456,350 (+4.8%), aligning with the rise in internet banking users.
• Mobile Banking: Increased from 56.19 million to 57.37 million (+2.1%), reinforcing its dominance in transaction volume.
• Branchless Banking: Rose from 71,582 to 85,758 (+19.8%), indicating continued relevance in areas with limited banking access.
• Wallet Transactions: Grew from 36.61 million to 37.66 million (+2.9%), driven by the expanding wallet user base.
• QR-Based Payments: Saw a strong increase from 31.33 million to 33.76 million (+7.8%), reflecting the growing popularity of contactless payments.
• Point of Sales (POS): Increased from 1.06 million to 1.20 million (+14.0%), indicating robust in-store digital transactions.
• E-Commerce: Slightly declined from 187,505 to 180,273 (-3.9%), possibly due to seasonal shopping trends.
• Faster Payment Systems: Remained nearly stable at 15.76 million transactions, with a marginal increase (+0.01%).
• Cross-Border QR Acquiring: Grew from 101,283 to 116,129 (+14.7%), signaling increasing integration with international payment systems.

Usage of Payment Systems: Transaction Amounts

Transaction amounts (in millions NPR) highlight the economic scale of payment systems:

• RTGS: Saw a significant increase from 4,704,595 to 6,108,824 (+29.8%), reflecting higher-value transactions in Baisakh.
• ATM-Cash Withdrawal: Increased from 93,845 to 95,987 (+2.3%), consistent with the rise in transaction numbers.
• ECC: Declined from 549,557 to 520,338 (-5.3%), aligning with the drop in ECC transaction volume.
• IPS: Decreased from 265,410 to 244,389 (-7.9%), consistent with the sharp decline in transaction numbers.
• Debit Cards: Grew from 98,036 to 101,415 (+3.4%), reflecting increased spending.
• Credit Cards: Slightly increased from 2,046 to 2,050 (+0.2%), showing stable credit usage.
• Prepaid Cards: Marginally rose from 994 to 998 (+0.4%), in line with the increase in prepaid card users.
• Internet Banking: Increased from 19,345 to 20,655 (+6.8%), consistent with growing user numbers and transactions.
• Mobile Banking: Grew from 450,453 to 456,954 (+1.4%), reinforcing its role as a key payment channel.
• Branchless Banking: Increased from 1,611 to 1,868 (+15.9%), reflecting higher usage in rural areas.
• Wallet Transactions: Rose from 43,916 to 44,872 (+2.2%), driven by the growing wallet user base.
• QR-Based Payments: Increased from 90,880 to 96,232 (+5.9%), reflecting the surge in transaction volume.
• Point of Sales (POS): Grew significantly from 6,058 to 7,255 (+19.8%), indicating higher in-store spending.
• E-Commerce: Increased from 1,168 to 1,218 (+4.3%), despite a slight drop in transaction numbers.
• Faster Payment Systems: Slightly increased from 470,648 to 472,664 (+0.4%), aligning with stable transaction volumes.
• Cross-Border QR Acquiring: Grew from 252 to 297 (+17.9%), reflecting increased international transaction activity.

Key Trends and Insights

1. Digital Payment Growth: Mobile banking, QR-based payments, and wallet transactions continue to dominate in both volume and value, with mobile banking alone accounting for over 57 million transactions in Baisakh 2082. The 7.8% growth in QR-based payment transactions highlights the increasing preference for contactless payments.
2. Decline in Traditional Systems: IPS and ECC transactions saw significant declines, suggesting a shift toward faster, real-time payment systems like ConnectIPS and mobile banking.
3. Card Usage Trends: Debit card transactions grew in both number and amount, while credit card usage remained modest. The slight decline in prepaid card transactions may reflect seasonal or market-specific factors.
4. High-Value Transactions: The 29.8% increase in RTGS transaction amounts underscores its critical role in large-value settlements, despite a drop in transaction numbers.
5. E-Commerce and Cross-Border Payments: While e-commerce transaction numbers slightly declined, the transaction amount increased, suggesting higher-value online purchases. Cross-border QR acquiring shows promising growth, indicating Nepal’s integration into global payment networks.

Conclusion

The data from Chaitra 2081 to Baisakh 2082 highlights Nepal’s ongoing transition toward a digital-first payment ecosystem. Mobile banking, QR-based payments, and wallets are driving transaction volumes, while RTGS remains crucial for high-value transactions. The decline in traditional systems like IPS and ECC, coupled with the growth in internet banking and cross-border payments, reflects evolving consumer preferences and technological advancements. As Nepal continues to expand its digital infrastructure, the focus on accessibility, user adoption, and integration with global systems will shape the future of its payment landscape.

Published by Nepal Rastra Bank