Dhanbari Maya, a resident of Taplejung, has recently gotten hooked to her new Smartphone. Her younger son, Sunil (27), gifted it on her 52^nd birthday. He has taught her to navigate the phone to do basic tasks like dial a number, and receive calls or text messages. Maya, who can barely manage to read, has a new-found liking to the game ‘Candy Crush’. Sunil says that because the cellular network around their village is mostly strong, he has also downloaded the phone application of eSewa, Nepal’s leading online payment gateway, into her phone.

“I asked one of my cousins working in Kathmandu to open an account and add a balance of NRS 1,000. I can top-up my phone balance using cellular data in just 10 seconds now. Everyone in my family watches with fascination when I do this. The concept is new to us, and in days to come, I am planning to learn more tasks I can do from the internet”, he explains. Sunil is one of the many Nepalis residing in rural parts of the country who has found joy and ease in using the most basic functionalities of payment through the internet.

In 2017, The Kathmandu Post had published an article which stated that one in every two Nepali had access to the internet. This was a sizeable increase in the user proportion considering how only 9 % of the population had used the internet in the year 2011. Fast forward eight years to now and the percentage of the internet users in Nepal has rocketed to 59.98%, as per Management Information System (MIS) report of March, 2019 released by the Nepal Telecommunications Authority (NTA).

This drastic leap is majorly accounted for the increased penetration of inexpensive phones in suburban and rural areas of the country. The two major telecommunication providers, NTC and NCELL, have expanded the cellular connection to almost every household of Nepal (95.62% of the people). The city crowd is used to connecting to Wi-Fi or LAN whereas people in the rural areas are prone to use cellular data to connect to the internet. 

As the internet is increasingly occupying more time and head-space of the people, it comes as anything but a surprise that old and new business are slowly conducting their monetary transactions online. Popular digital wallets like eSewa and Khalti have partnered with various merchants to make online payment of electricity, water, cable, ISPs, cellular networks, flights, movies and hotel-bookings efficient and easy. These two leading digital rivals have been creating a healthy competition in the transaction market to drive digitization aggressively ahead in Nepal.

eSewa, Nepal’s first and leading online payment gateway, had made an early entry in the market in 2010 and has partnered with more than 50 banks as of now. F1Soft, the umbrella FinTech Company for eSewa, has taken up the challenge to convert the current digitized transaction rate of 3% to 20% by the year 2020’s end.

Similarly, Khalti, the second most popular e-wallet in Nepal, has been able to garner the partnership of more than 45 banks in the span of two years since its inception in 2017. They recently initiated a project titled ‘Smart Chhori’ that aims to educate girls, especially from the rural areas, on financial and digital literacy. “The main purpose of Smart Chhori is to educate the girls about the basics of trading, saving and the use of e-wallets so that they can educate everyone in their family and become the agents of change”, says Amit Agrawal, one of the co-founders of Khalti.

The main concern for local e-payment providers is that there aren’t as many services that have facilitated digital payment in the first place. For example, bus tokens haven’t been digitized as of yet because it is less feasible for buses to move to a cashless payment system in our local scenario. Similarly, it is not possible to make an international payment from Nepal using a Nepali card or a direct service provider –Nepal Rastra Bank has strict rules against the outflow of Nepali cash. The decision was taken considering the frail export condition of Nepal. Nepal imports almost 13 times more products than it exports; if international payment is made easily accessible from the country, the resulting imbalance in Terms of Trade can bring havoc to the GDP.

However, the government can still do a lot in advocating local digitization within the country. If the country can slowly move towards normalizing digitization, our financial efficiency in facilitating transactions could be tripled; 8 working hours a day could be converted to 24 working hours a day as online transactions could be done any time of the day. But, to expect such a drastic change sooner would not only be simple-minded but also highly unrealistic, considering how complacency seeps through most of the corporations in here.

Apart from e-wallets, Sunil has also has heard of Western Union, IME pay, iPay and few other financial service providers. He has a joint bank account with his wife, Kanta, in a local bank where he has deposited his savings. When asked about what he would want to do with his savings, he wishfully replied, “I want to go to Kathmandu, work for a while and build a big house in the city. And if I have more money, I would invest it in my farmland.” Not just for the city dwellers but also for someone like Sunil who has dreams of making it big in the city or his village itself, an efficient provision of cashless transactions (with proper training) would make his financial life comparatively convenient and hassle-free.

By Shreya Pokharel