India and Nepal are set to sign an agreement that allows tourists to make digital payments using Indian e-wallets in Nepal and vice versa. This move eliminates the need for carrying physical currency and aims to boost bilateral trade and economic activities. The agreement will be signed during Nepali Prime Minister Pushpa Kamal Dahal’s visit to New Delhi, along with other agreements on hydropower projects and a transmission line. With India being Nepal’s largest trade partner and source of investment, the integration of Indian e-wallets is expected to have a positive impact on bilateral trade and Nepal’s economy.
About Unified Payment Interface
UPI is one of the most popular real-time payment systems in the world. It offers simplicity, safety, and security in person-to-person (P2P) and merchant-to-merchant (P2M) transactions. In 2021, UPI facilitated 39 billion financial transactions totaling USD 940 billion in commerce, which is comparable to around 31% of India’s GDP. UPI’s real-time payment system will assist Nepal’s financial inclusion initiative to move forward. Furthermore, it will expand commercial opportunities. Similarly, it will aid in the modernization of Nepal’s digital payment infrastructure and provide citizens with the convenience of digital payments.
Also Read: Fonepay and NPCI Collaborate to Launch Cross-Border QR Payment Solution Between Nepal and India
Unified Payment Interface in Nepal
The purpose of the Unified Payment Interface in Nepal is to promote interoperable real-time Person to Person (P2P) and Merchant payment transactions (P2M) in Nepal. Nepal will be the first country outside of India to embrace UPI as a payment platform, enabling the digitalization of cash transactions. It will help in enhancing the visions and objectives of the Nepal Government and Nepal Rastra Bank as the Central Bank.
This collaboration will allow Nepalese last-mile consumers to benefit from an open, interoperable payment system that enables real-time financial transfers between bank accounts and merchant payments. It will pave the way for real-time cross-border P2P transfers between Nepal and India in the future.
Gateway Payment Service Private Limited, a payment services operator, is set to introduce a revolutionary border payment system in Nepal. This innovative system is based on interoperable and mobile technology, marking the first of its kind in the country. It is said that Nepalese Indian visitors will no longer need to carry physical cash. Instead, they will be able to make payments simply by scanning quick response (QR) codes.
What role will these companies play in Nepal’s UPI solution?
- NPCI International Payments Ltd (NPL) provides the NPCI’s flagship Payments Interface (UPI) platform in Nepal.
- This collaboration will allow Nepal to develop a real-time payments system, utilizing NPCI’s best-in-class technology to democratize payments and eliminate cash.
- As Nepal Rastra Bank Authorized Payment System Operators, Gateway Payment Service will run and manage a UPI in Nepal.
- Manam Infotech Pvt Ltd will provide UPI technology and operations support working closely with the Gateway Payment Service in Nepal.
With this, all Nepalese traveling to India can pay via Google Pay by scanning QR codes. Similarly, visitors from India can make digital payments to any bank account in Nepal using Google Pay, or Phone Pay, as well as make a transaction to any bank account in Nepal.
What are the benefits of the UPI system?
Some of the benefits of the UPI system are:
- Link multiple bank accounts for seamless payments.
- RBI-regulated, ensuring safety and security.
- Payments are made using virtual addresses, eliminating the need to remember bank account details.
- UPI IDs protect against data breaches.
- Available 24/7, including holidays and after bank working hours.
- Easy payment of utility bills and mobile recharges.
- Merchants can make vendor payments and manage invoices efficiently.
- Register complaints within the UPI app for any payment issues.
- Regular UPI transactions may offer in-app vouchers and cashback offers.
- UPI enables transactions in the exact amount owed, eliminating the need for change.
With these features, UPI provides a convenient and hassle-free payment experience for users.
How to use UPI in Nepal?
After launch, the individual people of Nepal can use the UPI service to transfer money globally. It is not confirmed yet but they may provide service via existing apps/Google Pay or may build new apps specifically for the country. If using the existing app (UPI-BHIM) or Google Play, here is the step-by-step to help you make UPI ID:
For UPI-BHIM App;
- Install UPI-BHIM from your app store (Google Play Store or Apple App Store).
- Choose your preferred language and verify your mobile number.
- Select your bank account from the list of available banks.
- Create your profile by entering your basic information like name, virtual ID, and password. The virtual ID you create will serve as your payment address.
- Link your bank account and account number to your virtual ID by going to the “Add/Link/Manage bank account” section in the app.
- Set up your mPIN, which will serve as your transaction password.
- Congratulations! You have successfully registered for UPI-BHIM.
Remember to enter your mPIN every time you make a transaction.
For Google Play App;
- Download the Google Pay app from the Play Store.
- Enter your mobile number and tap on “Next.”
- Wait for the OTP SMS sent by Google Pay to your phone.
- Set a PIN for the Google Pay app.
- Tap on “New payment” and select your bank.
- Choose your bank account and have your debit card ready.
- Enter the last 6 digits of your debit card and verify it with the OTP sent to your registered mobile number.
- Set a 4-digit UPI pin.
That’s it! You have successfully set up Google Pay and created your UPI pin. Now you can start making payments using the app.
Conclusion: Unified Payment Interface
Well, every developing step is a game changer, and this service will help to make financial transactions accessible, affordable, and convenient for individuals across various segments of society. This advancement in technology in Nepal will play a crucial role in promoting financial inclusion and enhancing transparency within the economy.
Frequently Asked Question
What is the Full Form of UPI?
The full form of UPI is the “Unified payment interface.”
When did UPI start in Nepal?
“UPI Nepal,” owned by Payment Nepal (Gateway Payment Service Pvt. Ltd.), a licensed Payment System Operator authorized by Nepal Rastra Bank, is set to launch by the end of 2022.
Is UPI valid in Nepal?
Yes, Nepal has achieved a significant milestone by becoming the first foreign country to adopt the Unified Payments Interface (UPI) as its payment platform.
What is the UPI (Unified Payment Interface) payment system in Nepal?
UPI-Nepal is a mobile application that integrates multiple bank accounts, enabling seamless fund routing, merchant payments, and “Peer to Peer” collect requests. This system consolidates various banking features into a single platform, providing convenience and flexibility for users.
Is Google Pay valid in Nepal?
Under the gateway agreement, Nepali citizens can transfer funds to any Indian bank using a QR code, while Indians can send money to any bank account in Nepal through Google Pay, PhonePe, and Paytm.
Is Bhim UPI launched in Nepal?
Nepal has recently embraced India’s unified payment interface (UPI) for digital transactions, according to a government publication. Earlier this year, Bhutan also introduced a payment service based on BHIM-UPI for digital transactions, as highlighted in a tweet by PIB.
Unified Payment Interface