Through this agreement, residents of India will be able to make mobile payments for goods and services, when visiting Nepal, from their smartphone’s digital wallet using an interoperable cross-border payments system to be implemented between the two countries.
The service will use a unified payments interface being developed in Nepal by the National Payments Corporation of India in collaboration with Gateway Payment Service and Manam Infotech.
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, according to the Business Standard newspaper.
The system will enable payments for larger digital goods and boost interoperable real-time person-to-person (P2P) and merchant payment transactions (P2M) in Nepal. The service is currently not on a reciprocal basis, and Nepalis are not allowed to make payments through Bharat-QR while travelling to India.
The Reserve Bank of India (RBI) has abandoned plans for a high-profile project intended to rival the country’s dominant payment system, Unified Payments Interface (UPI). RBI had initially invited bids in 2021 for licenses to operate new retail payment and settlement systems across India. The project was called New Umbrella Entity, or NUE.
However, according to RBI’s officials, the project’s potential participants failed to propose ‘any innovative or infrastructural solutions.’ They emphasised the central bank’s interest in exploring ideas that go beyond incremental improvements or substitutes for existing technologies.
UPI, which now processes over 8 billion transactions a month, was inching closer to the 1 billion milestone in 2021. The central bank sought to mitigate concentration risk as UPI’s importance in the economy continued to grow, aiming to develop an alternative protocol that would alleviate strain on the existing system.
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