Electronic payments projected to shoot upTransactions through electronic payment gateways have been projected to shoot up, with an increasing number of people preferring online payments for goods and services.
Transactions through electronic payment gateways have been projected to shoot up, with an increasing number of people preferring online payments for goods and services.
Easy availability of high-speed mobile data has also helped boost electronic payment, according to stakeholders.
Companies offering e-payment gateways follow a digital wallet-based business model facilitating swift transactions among businesses and customers.
Nepal’s leading e-payment companies like eSewa and iPay have shot up the growth projections. “After the inception of iPay, a subsidiary of e-tailing business Muncha.com, in 2013, our company has experienced a growth of 500-600 percent,” said Subash Dhungana, director of iPay.
“The sector is likely to experience an aggressive growth as more and more businesses along with netizens across the country are connecting to and transacting via web- and application-based services.”
According to Dhungana, iPay is carrying out a focused marketing campaign targeting able but unaware youths and working-class community across the country as an expansion strategy. Currently, more than 100,000 customers have been using ipay services and the company plans to hike up the figures to 500,000 within this year.
“Moreover, the user base of e-payment mobile applications has also reached 30,000 and queries relating registration and transaction from areas outside Kathmandu valley have also increased,” Dhungana said.
With the planned launch of high-speed data technologies like 4G by Nepali telecommunication companies, formulation of regulatory framework by the Nepal Rastra Bank (NRB) and increasing online presence of business and customers, total transaction volume of online gateways is set to soar significantly in a few years.
The e-payment service is especially popular among the youths. “The recent cricket tournament between Nepal and Namibia saw a 100 percent ticket sales via eSewa within a short span of a day or two, reflecting an increasing preference of youth community in easy transaction services,” said Bishwas Dhakal, chief executive officer of F1soft which operates eSewa.
Currently, large portions of transaction occur in the utility-bill payments segment followed by ticketing services and e-tailing payment services. Sixty-five percent of the total revenue is derived through utility payments and the remaining occur in travel, entertainment, remittance and other e-tailing channels,” said Dhakal. “The company is experiencing a growth in user-base by around 100 percent each year and the number will shoot up after the industry comes under the NRB regulations.”
Despite the substantial growth, issues related to financial literacy and lack of public trust in online payment mechanisms have remained as key hindrance to the development of the services, the stakeholders say.
Cash transaction still dominates the way Nepali people make payments. Despite increased use of e-payment services, the authorities are yet to come up with necessary regulations so that people are assured about doing transactions electronically.
NRB has said it has initiated policy-level discussions to develop public confidence and ensure security of online transactions.
“The increasing use of e-payment instruments and channels and need of the economy to shift to electronic payments has prompted NRB to bring necessary policies and rules,” said NRB Spokesperson Trilochan Pangeni. “We are holding discussions on how to regulate the system.”