The Covid-19 pandemic brought untold misery to Nepal. Over 12,000 people died from the virus. The national economy was decimated, and tourism came to a juddering halt. Yet even this darkest of clouds had a silver lining: The pandemic accelerated Nepal’s switch to a cashless economy. The four months of a hard lockdown in 2020, followed by many more months of limited mobility, forced even the otherwise digitally illiterate people to gradually take up online transactions, to pay for everything from daily vegetables to power bills. Digital payments shot up by 18 percent year-on-year in the final month of the fiscal year 2021-22, to hit Rs6.22 trillion. The corresponding figure for the previous fiscal was 5.26 trillion, which in turn was almost the double of the figure of Rs2.76 trillion in the fiscal 2019-20. There have of late been more indications of digitisation. According to the Nepal Rastra Bank, the number of cheques presented at banks dropped by 8.97 percent, from 16.72 million in 2021-22 to 15.22 million in the fiscal year 2022-23. In the same period, the number of transactions done through Quick Response (QR) codes doubled.

This is something to be celebrated as a cashless economy has many benefits over a cash-based one. In a country where corruption has come to be synonymous with government service, digitisation can clean up governance and service-delivery. For instance, when people start paying online to renew driving licences or to clear land taxes, the role of the middlemen, who are responsible for most corruption in Nepal, will be reduced. There is also no question of such middlemen syphoning off the monthly stipends for the elderly and single women—something that routinely happened in the past—when such payments go directly into the bank accounts of the beneficiaries. It is also harder to cheat on taxes online. More obviously, when you can pay your electricity and water bills from the confines of your home, the hassle of having to physically visit these offices and stand in long lines is removed. During the pandemic, looking to make themselves useful, even older folks started learning e-business from their more tech-savvy and younger family members.

So the country has come a long way in e-transactions since the dark days of Covid. Things could be better though. The government, instead of helping with the process, often hinders e-commerce. For instance, online transactions are still taxed. The government says it will fully refund taxes on such transactions. Such refunds are rare. But why at all impose taxes that have to be refunded? Internet costs in Nepal are also high. According to the Connectivity in the Least Developed Countries Status Report 2021, Nepalis pay more for internet access than most other South Asians. In 2020, Nepalis had to spend 2.6 percent of their gross annual income to buy internet service, much more than what their counterparts in India, Sri Lanka or Pakistan forked out, where the corresponding cost was under 1 percent. It does not help that Nepali e-business laws are ambiguous and discouraging for online service providers. If only the most obvious and easiest roadblocks are cleared, the country will be on its way to a near full digitisation of its economy in the near future—to immeasurable benefit for the wellbeing of common Nepalis.