In a significant move towards financial integration, Nepal and India have signed a memorandum of understanding (MoU) for cross-border digital payment. This development is expected to facilitate digital transactions for business people, students, and tourists from both countries, marking a new era of financial connectivity between the two nations.
The MoU and Its Significance
The MoU was signed by Neelesh Man Singh Pradhan, CEO of Nepal Clearing House Limited, and Ritesh Shukla, CEO of National Payment Corporation of India (NPCI) International Payments Limited, in New Delhi, India. The agreement is set to ease cross-border payments, a much-needed facility for business people, students, pilgrims, and travellers from both Nepal and India.
The cross-border digital payment service will be available for both countries while travelling to each other’s country. This is expected to benefit thousands of students, hundreds of thousands of tourists, pilgrims, and people leaving for medical treatment in India.
The Integration of Payment Systems
The integration of Nepal Clearing House and the unified payment interface (UPI) of the National Payment Corporation of India is currently underway. Once completed, the two organizations will discuss and work on payment methods. The central bank of Nepal is optimistic about facilitating and enabling roles in the India-Nepal e-commerce and financial technology sector and is prepared to work on the regulating part for cross-border digital payment.
The Impact on Tourism and Business
The launch of digital payment services is expected to eliminate the hassle of carrying large amounts of cash for Indian tourists and businessmen in Nepal. Indian banknotes of denominations above Rs100 are banned in Nepal, which has made it difficult for Indian visitors as they have to carry money in bundles. The new system will enable payments for larger digital goods and boost interoperable real-time person-to-person (P2P) and merchant payment transactions (P2M).
The signing of the MoU for cross-border digital payment between Nepal and India is a significant step towards financial integration between the two countries. This development is expected to facilitate digital transactions, thereby benefiting business people, students, and tourists from both nations. As the world moves towards digitalization, such initiatives are crucial in promoting ease of transactions and fostering economic growth and development.