Nepal and India are set to sign an agreement for cross-border digital payments using e-wallet, which is expected to boost trade and tourism by eliminating currency hassles.
The deal is expected to be signed during Prime Minister Pushpa Kamal Dahal's visit to India sometime this month, according to Nepali media reports.
The accord will allow Indian tourists in Nepal to make digital payments using Indian e-wallets like BharatPe, PhonePe, Google Pay and Paytm.
According to the reports, the two neighbours have chalked out an agreement for this purpose, and the document is awaiting signatures from both countries' officials.
New Delhi's Ambassador to Kathmandu, Naveen Srivastava said at a recent programme that the proposed Indian digital payment service in Nepal would boost its travel and tourism industry.
An overland Indian visitors' survey conducted before the Covid-19 pandemic showed that the average length of stay of Indian tourists coming overland was 5.8 days. The average expenditure per visitor was Rs 11,310.
According to Indian media reports, the advantage of travelling to Nepal is that one did not need to change money.
Tourism entrepreneurs say that the launch of digital payment services will eliminate the hassle of carrying large amounts of cash for Indian tourists and businessmen in Nepal.
Last May, payment system operator Gateway Payment Service began a cross-border payment system for the first time in Nepal based on inter-operable and mobile-first technology.
The National Payment Corporation of India and its international arm International Payments had joined hands with Gateway Payment Service and Manam Infotech to deploy a unified payment interface in Nepal.
The system will enable payments for larger digital goods and boost inter-operable real-time person-to-person (P2P) and merchant payment transactions (P2M) in Nepal.
The unified payment interface is a real-time payment system that provides person-to-person and person-to-merchant transactions simply, safely and securely in India.
The system is currently not on a reciprocal basis, and Nepalis are not allowed to make payments through Bharat-QR while travelling to India.
Recently, Nepal Rastra Bank Governor Maha Prasad Adhikari underscored the need for greater collaboration on fintech between India and Nepal to begin a cross-border and QR payment systems for mutual benefit.
"We expect a collaboration between the Nepali and Indian private fintech companies by sharing of the infrastructure and mitigating cyber-related risks, which could benefit both countries," he said.
Nepal's central bank is positive about facilitating as well as enabling roles in the India-Nepal e-commerce and financial technology sector, the central bank said.
Though India is a close neighbour of Nepal, financial transactions between the two countries are complicated.
In January, the government opened the door to foreign investors to participate in Nepal's digital payment system under a newly amended policy.