If you are thinking of buying a product from Amazon; paying on your own for online ads, Netflix subscriptions, Coursera, or Udemy courses; it is not a far-fetched dream from now on. You can finally make international payments from Nepal.
On 28th of December, 2077, NRB published a Consultation Document on its official website, regarding the long-awaited provision of international payment services through online medium. In this notice, with respect to the 66th point of the first quarter review document for FY 2077/78, it was quoted “ Arrangement will be made for international payment from Nepal and conversion of currency for limited purchase/ import of foreign goods and services online”.
Yes, you got it right. An international payment method equivalent to PayPal or Payoneer is soon to be introduced where Nepalese can make payments for the international product or services they use.
How did NRB come to this decision?
Back on Jestha 06, 2076, Nepal Rastra Bank (NRB) had released a notice that said: Any payment made from the use of QR Code, POS Machine or other Payment System (like WeChat Pay, Alipay, etc), made through the institutions except sanctioned by the central bank are considered illegal.
For more details, see here https://www.nrb.org.np/contents/uploads/2019/12/fxm_notice20190520
It had ever since been a hassle for Nepalese to make international payments while our neighboring citizens were enjoying Paypal, Whatsapp Pay, and other international payment services. On this backdrop, there has been a dire need for an international payment system for the development of e-commerce, access to international education, and foreign purchases/imports.
To address this fact, NRB Governor Maha Prasad Adhikari had shared,
“NRB is soon making provision to allow Nepalese to open their dollar account up to $500 in the balance, to make payments on the purchase of foreign goods/ services for domestic consumption or running business.” back on the Digital Economy Conclave on 28th of November. Sticking to this assurance, NRB has finally come up with the decision to introduce an international payment gateway for Nepalese consumers.“
Present Scenario
In recent times, the digital presence of any business has been very crucial. For this, advertising through social media and digital mediums like Facebook, Instagram, Youtube, Google, etc. has been more in practice which is done on foreign currency (usually on USD). Similarly, from gaining an international academic certificate to domain registration and web hosting, Facebook page boosting, to subscription of various apps and services, petty payment with foreign currency conversion was not easily possible.
To date, we could only purchase foreign goods and services from Nepal to the extent of $2,000 in a year via our debit/credit card. And even this was not easier due to the lack of international payment methods for Nepalese consumers.
In this regard, commercial banks have been making payments on the behalf of their clients up to $3,000 upon the client’s request. It was required to get recommended by the central bank to make payments from $3,000 to $10,000.
As an immediate solution, Nepalese have been using Paypal and Payoneer cards of their relatives dwelling abroad, which had been identified as “Digital Hundi” by NRB since it had been escaping the tax revenue collection to the government from these transactions and impliedly promoting “Shadow Economy”.
Alternatives Available for International Payments from Nepal till Date
- Travel Card issued on US Dollar where the visa is mandatory and one would get the card with a limit of $1500 one time only
- Payoneer cards that require bothersome procedures
- American Express Card, which is issued by Himalayan Bank Limited (HBL) only in Nepal, with a limit of NRS 40,000 to NRS 50,000 (only for limited clients)
PS: (American Express Card is provided mainly for business personnel only who have at least a minimum income of Rs 1 lakh or have foreign employment.)
Proposed Solution: International Payments from Nepal
Nepal Rastra Bank has welcomed the concept of digital economy and has made an arrangement where banks can now issue Prepaid Cards for international payment of goods and services with a maximum limit of $500.The following are the provisions that NRB has allowed for Nepalese:
- Any person, firm, company, or organization willing to get a prepaid card on foreign currency can get it by converting their existing fund in NRS to the foreign currency from the banks.
- For issuing this card, users must have updated their KYC from the respective banks and should have a PAN number.
- Users can enjoy this service at a maximum of $500 either through one transaction at a time annually or time and again
- Users can only import/purchase the products/services that have been allowed by the prevailing law.
- If the cardholder is found to have generated foreign income amounting to at least double the card amount of $500, additional funds may be deposited to the card. This can be considered as NRB’s reward to the cardholder for generating international revenue for the country.
Click Here For more details: Draft for Consulation
This step taken by NRB can be a remarkable effort from its side to reach the aim of uplifting the economic status of our country along with attaining the goal of digital economy. It would be beneficial to e-commerce businesses, SMEs and MSMEs, freelancers and aspiring students for enjoying the international products and services and to expand their business globally. However, the concern is, “ How would it affect the domestic industries and businesses?”. For this service would make it easier for making payments for imports from Amazon, Flipkart and other international giants. Would this be a threat to Nepalese businesses since Nepalese consumers can switch to foreign products and services at large, which would affect the patterns of our foreign trade?
However, Techsathi welcomes this commendable decision made by NRB to finally allow international payment gateway.
