Digital payment system likely to launch in first quarter of next fiscalThe plan was delayed by a year in order to include the whole payments ecosystem, officials said.
The digital payment system announced last year will likely come into operation in the first quarter of 2020-21 after some fine points are worked out, officials said. It was originally planned to launch in April 2019, but was bogged down in operational details and got held up.
According to Sunil Paudel, executive director of the National Information and Technology Centre, the report prepared by a three-party task force has been sent to Nepal Rastra Bank which will decide the roles and responsibilities.
After the central bank gives its decision, the report will be forwarded to the Ministry of Finance for its approval before the digital payment system comes into operation.
Rewati Prasad Nepal, executive director of the payment system department at Nepal Rastra Bank, said they were yet to reach a final decision.
He said that the system would initially be applied to government payment and collection, and that it would take around two years to prepare a national payment gateway.
The system has a limited capacity, and it will not cover all areas, he added. “We will try to digitalise the entire payment system, but there is not much chance of that,” said Nepal.
Paudel said that the launch of the digital payment system was delayed by a year in order to include the whole payments ecosystem by setting up a national payment gateway.
With the expansion in the previous scope, the implementation was delayed by a year. It was originally planned to be used for government transactions only, and Nepal Rastra Bank got involved with the view of enlarging its reach. Last year, work was mainly focused on preparing it for government transactions, said Paudel.
Nepal said that the plan to introduce a digital payment system had been included in this year's budget statement, but he was not aware of how much funding had been allocated for the purpose in the budget.
The government's annual financial plan for the fiscal year 2019-20 had said that a national payment gateway would be created to transfer money from the buyer's account to the seller's account.
The 2020-21 budget announced recently also says that arrangements would be made to enable all types of payments to be made through the national payment gateway.
The information technology infrastructure was prepared last year, and five commercial banks have already been connected to the system.
Previously, it was planned to be operated by the centre by creating a settlement bank. Now it has been decided that Nepal Rastra Bank will own the business process as it will be easy to integrate all the payment systems, said Paudel.
The digital payment system will come into operation as soon as the operational roles and responsibilities are fixed by the government since the infrastructure is ready. The centre that said that it would come into operation in the first quarter of fiscal 2020-21.
“The system is being continuously monitored and upgraded to keep it ready for launch as soon as we get the word,” Paudel said. The security component is also being studied, he added.