Nepal Registers New Payment Bill to Modernize Digital Payments and Open Door for Global Payment Providers

Nepal’s government has taken a major step toward modernizing the country’s digital payment system by registering a bill to amend the Payment and Settlement Act, 2075. Finance Minister Dr. Swarnim Wagle registered the bill in the Federal Parliament on Thursday. The proposed changes aim to make payment services more modern, secure and organized as digital transactions continue to become an important part of daily life in Nepal.

One of the key changes in the bill is the possibility of allowing experienced foreign payment institutions to operate in Nepal. Foreign institutions with at least 10 years of payment-related experience in 10 or more countries could be allowed to provide services in Nepal if they meet the conditions set by Nepal Rastra Bank. This could create a pathway for major international payment companies such as PayPal and Stripe to potentially enter the Nepali market, although the bill does not specifically name these companies and their operation would still depend on regulatory approval.

New Rules for Digital Payments

The proposed bill also provides clearer definitions and rules for digital payment services and international payment service providers. This is expected to create a more organized legal framework for Nepal’s growing digital payment sector.

The bill would also allow payment service providers to appoint agents to provide services. This could help payment companies reach more customers, particularly in areas where access to formal digital payment services is still limited.

Stronger Protection for Customers

Customer protection is another major part of the proposed changes. Under the bill, if a payment service provider loses its license or fails to have its license renewed, it would be required to return customers’ e-money within 30 days.

The provision is important because customers need clear protection when a payment company stops operating. A fixed refund period could provide greater confidence to people using digital wallets and other electronic payment services.

More Power for Nepal Rastra Bank

The proposed law would also strengthen the role of Nepal Rastra Bank in managing the payment system. The central bank would be able to provide liquidity facilities for final settlement and issue necessary directives and orders related to payment and settlement services.

These powers could help improve the stability of the payment system and support smooth settlement between financial institutions and payment service providers.

What Could This Mean for Nepal?

If approved, the bill could mark an important change in Nepal’s digital payment industry. More international payment providers could increase competition and give Nepali consumers and businesses access to a wider range of payment services.

For businesses, especially those involved in international trade, freelancing, online services and e-commerce, easier access to international payment systems could be significant. However, the bill is only at the legislative stage. It must go through the Federal Parliament’s approval process before the proposed provisions become law.

The possible entry of companies such as PayPal and Stripe should therefore be viewed as an opportunity created by the proposed legal framework, rather than a confirmed launch of their services in Nepal.