98.43 trillion Nepali rupees. That is the total value of digital transactions that have taken place in the fiscal year 2024–25. The availability of cheaper smart gadgets along with affordable data packs has enabled non-currency digital transactions for everyday public utility services. Digital payments across the Asia-Pacific region have surged ahead of those in North America, supported by government-led efforts to expand financial inclusion and develop mobile-first financial infrastructure. Invented by Masahiro Hara of Japan in 1994, financial technology using the QR code system gained popularity over time with the launch of Google Wallet (now Google Pay), Apple Pay, WeChat Wallet and the Unified Payments Interface (UPI).

Nepal’s digital payment market is on the rise. While eSewa had the first-mover advantage in the digital wallet ecosystem, catering to around 13 million users, the recent merger between IME Pay and Khalti signals a strategic push to consolidate their combined capital strength and user reach. Fonepay, with its huge transaction volumes and ease of interoperability payments between wallets and banks, dominates person-to-merchant (P2M) QR transactions and is a vital network backbone for QR-based commerce. ConnectIPS deserves a mention, as its users can link multiple bank accounts from various banks directly to one ConnectIPS profile without the hassle of adding funds into an intermediary wallet, with the added bonus of being widely integrated into the government’s revenue payment system.

Similarly, Namaste Pay, with its unique structure that enables both online and offline access via USSD for feature phones through mobile balance, makes the payment structure more accessible to a less tech-savvy customer base and boosts financial inclusion of rural users. Fonepay’s integration with nearly every major financial service in Nepal, and its strategic partnership with NIPL—the international arm of the National Payments Corporation of India (NPCI)—has further enabled seamless, real-time cross-border digital transactions. Although currently only 5 percent of Nepal’s overall economy is digitised, given the pace of progress, there is significant room for growth in the country’s digital payments landscape.

With remittance from abroad contributing to about 26 percent of the GDP, Nepal could benefit massively from cross-border payment agreements, similar to what India’s UPI has with Singapore’s PayNow that allows instant low-cost border remittances. Although cross-border payments between India and Nepal are yet to reach the same level of efficacy and ease, it should be noted that while Indian tourists in Nepal can make QR-based payments using PhonePe and Google Pay, Nepali tourists in India cannot, despite Nepal Clearing House Limited having signed an MoU with India’s Unified Payment Interface.

One doesn’t have to look too far to witness the strong rise of digital payment networks that facilitate cross-border transactions with ease. Thailand has linked its PromptPay QR system with China, Malaysia, Indonesia, Singapore, Vietnam and Laos, which allows tourists to make instant, cashless payments across borders. Through partnerships with Alipay, UnionPay, WeChat Pay, QRIS, NETS and DuitNow and support from the Bank of Thailand, these connections simplify regional trade and reduce dependence on cash.

Similarly, in India, the UPI network has been capitalising on its digital infrastructure to strengthen digital connectivity within the country, outsource its services to overseas digital markets and also further its diplomatic agenda as a pioneer in the sector that has democratised the online payment system. With the rise in annual digital payment volume by 50 percent, the UPI network’s success is a testament to its zero-cost structure, real-time interoperable payment system that can link up several bank accounts and the ease with which transactions can be carried out.

The George Town Accord is a recent development by ASEAN member countries, namely Malaysia, Singapore, Vietnam, the Philippines and Indonesia, who have signed an MoU to establish a global standard payment system with shared expertise from the national payment networks from their respective countries to enable smoother cross-border transactions. The success of this digital framework will enhance financial inclusion, increase transparency, reduce costs and ultimately stimulate economic growth amongst its signatories.

And as the global south progresses towards a mobile-based digital payment future, it’s important to note that such progress too comes at a cost. The obvious cautionary tale involves the growing instances of fraudulent payment scams, the glaring digital literacy divide between rural and urban areas, infrastructural gaps and data privacy concerns. Addressing these issues is not only vital but also critical for the long-term growth of digital payment infrastructure. Without necessary safeguards, such as a comprehensive digital payments law, clear licensing requirements, regular security audits and user content transparency, the ease of the digital payment infrastructure in Nepal risks being undermined by structural and operational challenges.

For Nepal, the digital payments story isn’t just about smartphones or QR codes; it’s about unlocking real economic potential and driving regional engagement. With mobile wallets, QR-based networks and remittances shaping the domestic financial landscape, there’s a huge opportunity for Nepal to leverage digital finance as a tool of digital diplomacy. Strengthening cross-border payment systems, bridging the digital literacy divide, investing in secure infrastructure and building strategic partnerships could make transactions seamless and inclusive and even position Nepal as a forward-looking player in the Asia-Pacific digital economy. The real potential lies not just in going cashless, but in turning digital payments into a platform for trust, connectivity and influence in the region.