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With the collaboration, Nepal will become the first country to adopt India’s UPI system

The platform will help the Nepal government and Nepal Rastra Bank to drive digitalisation of cash transactions

The move will also enable the way forward for real-time cross-border person-to-person (P2P) remittances

To deploy Unified Payments Interface (UPI) services in Nepal, NPCI International Payments Ltd (NIPL), the international arm of NPCI, has partnered with Gateway Payments Service (GPS) and Manam Infotech. 

GPS is the authorised payment system operator in Nepal and Manam Infotech will help in deployment of the services in Nepal.

Nepal will become the first country outside India to adopt UPI as the payment platform driving the digitalisation of cash transactions and attaining the objectives of the Nepal government and Nepal Rastra Bank as the central bank, said National Payments Corporation of India (NPCI).

Announcing the partnership, NIPL CEO Ritesh Shukla said, “We are delighted to join hands with GPS and Manam Infotech to facilitate the deployment of NPCI’s flagship UPI in Nepal. At NIPL, we are committed to transforming payments by taking our robust payments solutions to global markets and collaborating with local payment system operators.”

“We are excited about this partnership, which will enable consumers within Nepal to transact swiftly using state-of-the-art UPI platform…We are confident that this initiative will stand as a testimony to NIPL’s technological capabilities and vision of scaling our unique offerings globally,” the NIPL CEO said.

NIPL, being an internationally focused subsidiary of NPCI, is looking to drive collaboration with overseas partners in the areas of UPI like deployment, cross-border remittance, acceptance, using indigenously developed technologies in digital payments.

This collaboration will enable the last-mile consumers in Nepal to reap benefits of an open interoperable payments system driving immediate payment transfers between bank accounts and merchant payments in real-time. 

It will also enable the way forward for real-time cross-border person-to-person (P2P) remittances between the Himalayan country and India.

UPI is among the most successful real-time payments (RTP) systems in the world, providing – simplicity, safety, and security to P2P and person to merchant (P2M) transactions in India.

In 2021, UPI enabled 39 Bn financial transactions amounting to business worth $940 Bn, which is equivalent to around 31% of India’s GDP. 

UPI’s real-time payment infrastructure will help catalyse the process of financial inclusion in Nepal and will also create more opportunities for businesses, said NPCI, the specialised division of Reserve Bank of India (RBI).

NPCI comes under the Ministry of Finance and was created by the central bank for operating retail payments and settlement systems in India.  

Gateway Payment Service (GPS) CEO Rajesh Prasad Manandhar is of the view that UPI would play a pivotal role in transforming the digital economy of Nepal and help achieve the dreams of building a less-cash society. 

“The same UPI service has created a significant positive impact in India in terms of the country’s digital payment transformation,” said Manandhar.

GPS is a payment system operator (PSO) licensed by Nepal Rastra Bank (central bank of Nepal). It has been issued with an open PSO licence to operate all types of payment and settlement-related technology and interfaces including payment gateway both domestic as well as international, Unified Payment Interface and Switch and Card Transaction, among others.

Praising the collaboration, director of Manam, Naga Babu Ramineni said, “Manam has always been part of major digital transformation across the world, we believe this partnership will eliminate all the barriers of payment transformation within Nepal and across the border thereby transforming the regional economy.”

Nepal has a population of about 30 Mn (3Cr) with around 45% people using banking related services. Mobile penetration of more than 135% with 65% of the population using smartphones provides an opportunity for seamless replication of the digital revolution in India to be replicated in the Himalayan nation.

Over the next few months, all three companies will work closely together to deploy UPI in Nepal with all the functionalities and features presently available in India.

Meanwhile, over the past couple of years, (National Payments Corporation of India) NPCI’s flagship product has expanded overseas, but the feature phone support for UPI announced in December 2021 could be more critical to UPI’s growth story as well as financial inclusion and digital penetration.

Launched in 2016, UPI has penetrated deep inside India. The ease of use and the interoperability between apps to a certain extent is the reason behind its success.

Before this, NPCI International collaborated with a company to facilitate UPI payments in the UAE. NPCI joined hands with Network International, an enabler of digital commerce across the Middle East and Africa. Network International has signed a Memorandum of Understanding with NPCI International Payments Ltd (NIPL), the international arm of NPCI in November 2021.