The National Payments Corporation of India (NPCI) said on 17 February that Nepal will be the first country to embrace India's Unified Payments Interface (UPI) system, which will play a key role in revolutionising the digital economy of the neighbouring country.
To deliver the services in Nepal, NPCI International Payments Limited (NIPL), NPCI's international arm, has partnered with Gateway Payments Service Private Limited (GPS), authorised Payment System Operators in Nepal and Bengaluru based firm, Manam Infotech.
According to a news release: “NIPL has joined hands with GPS and Manam Infotech Private Limited to deploy UPI in Nepal for the larger Digital Public Good and to bolster interoperable real-time Person to person (P2P) and Merchant payment transactions (P2M) in Nepal.”
“Nepal shall be the first country outside of India to adopt UPI as the payments platform driving the digitalization of cash transactions and furthering the vision and objectives of the Nepal Government and Nepal Rastra Bank as the Central bank,” the news release added.
It is expected that this collaboration will allow residents of Nepal last-mile consumers to benefit from an open, interoperable payment system that enables real-time financial transfers between bank accounts and merchant payments. Additionally, it will pave the way for real-time cross-border P2P transfers between Nepal and India in the future, according to the news release.
Rajesh Prasad Manandhar, who is the chief executive officer (CEO) of GPS said: “The same UPI service has created a significant positive impact in India in terms of the country’s digital payment transformation. We expect UPI in Nepal would play a pivotal role in transforming the digital economy of the country and dreams of building a less-cash society.”
Ritesh Shukla, the CEO of NIPL stated: “At NIPL, we are committed to transforming payments by taking our robust payments solutions to global markets and collaborating with local payment system operators. We are excited about this partnership, which will enable consumers within Nepal to transact swiftly using a state-of-the-art UPI platform and deliver a seamless user experience.
“We are confident that this initiative will stand as a testimony to NIPL’s technological capabilities and vision of scaling our unique offerings globally," Shukla added.
Meanwhile, the director of Manam Infotech, Naga Babu Ramineni said that this new agreement is expected to remove all payment transformation barriers both within Nepal and across the border, changing the regional economy.
UPI is one of the most popular real-time payment systems in the world, offering ease, safety, and security in P2P and P2M transactions in India. Last year, UPI facilitated 39 billion financial transactions totalling $940 billion in commerce, which is comparable to around 31 per cent of India's GDP.
As claimed by the collaborators, UPI's real-time payment system can help accelerate Nepal's financial inclusion process while also expanding commercial prospects. It will aid in the modernisation of Nepal's digital payment infrastructure and provide citizens with the convenience of digital payments.
Nepal has a population of 30 million people, with 45 per cent of them being banked. With a mobile penetration rate of over 135 per cent and 65 per cent of the population owning a smartphone, Nepal is well-positioned to replicate India's digital revolution.
However, over the next few months, the firms will collaborate closely to bring the UPI to Nepal, complete with all of the functionality and capabilities now available in India.
Additionally, NIPL aims to foster close collaboration with foreign partners in areas such as UPI implementation, cross-border remittance, acceptance, and the use of indigenously produced technologies in digital payments.
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