I hadn’t even picked up my luggage when I noticed it right at the airport restaurant—a small QR code taped to the counter with a bright “Scan to Pay” sign. After living in China for over three years, where platforms like WeChat Pay and Alipay dominate even the most mundane transactions, I had grown used to a society where cash was almost obsolete. But to witness this shift happening back home, quietly and organically, was truly remarkable. I was stunned but very proud. I quickly realized that Nepal has changed — and rapidly, at least in the digital payment sector.
During my short time back home, I’ve seen a wave of digital transformation sweeping through our markets, our youth, and even some of our elders. Once reluctant to part with cash, many vendors now reach for their phones before reaching for a ten-rupee note. Digital wallets like eSewa, Khalti, and FonePay have become brand names. Almost all banks have integrated digital payment systems into their banking apps. For someone who’s been studying in a hyper-digitized country like China, witnessing Nepal catch up so quickly felt like watching a quiet revolution unfold. Nepal's digital payment revolution didn't happen overnight. It was a slow build, accelerated by a few key moments: the push for financial inclusion post-earthquake in 2015, the pandemic-induced need for contactless payments, and the rise of mobile internet access even in semi-urban areas.
Wallets like eSewa and Khalti began as convenience apps but have since become integral to daily transactions. According to Nepal Rastra Bank (NRB), digital payment transactions reached over Rs 18 trillion in FY 2023/24, a 64 percent increase from the previous year. Just five years earlier, the figure was under Rs 2 trillion, underscoring just how rapidly this transformation has taken place. Platforms like FonePay and IME Pay have also joined the race, offering everything from utility bill payments to loan EMI collections. QR codes are now as common in the hands of fruit vendors and grocery sellers as they are in urban shops, restaurants, and cafes.
In a conversation about Nepal’s wave of digital payment adoption, Former Foreign Minister and current Deputy General Secretary of CPN (UML) Pradeep Gyawali described the transformation as “both exciting and inspiring.” “Nepal has achieved significant progress in digital payments in a remarkably short time,” he said. “It has brought convenience, enhanced transparency, promoted good governance, created jobs, and even reduced the government’s expenditure on printing cash.”
But here lies the deeper question: Is Nepal’s digital payment revolution truly inclusive? Unfortunately, the answer leans toward no. While urban centers are racing ahead, it feels like much of rural Nepal is merely walking.
While trekking through Ghandruk, I was surprised to spot QR code payment signs tucked inside a typical tea house. The sight felt almost out of place in such a mountain village, yet I quickly realized why it worked here. Ghandruk draws a steady stream of domestic and international tourists, many of whom might prefer the convenience of cashless transactions. But when we stepped down from Ghandruk and passed through a quieter, more typical village where we stopped for lunch, there was no trace of digital payment. Curious, I asked the lunch shop owner, “Do you accept digital payment here?” She replied that they weren’t quite familiar with the system and found it hard to catch on to the digital wave. They had bank accounts but feared using digital payment. The contrast between bustling, tourist-driven Ghandruk and these less-visited villages highlighted two very different realities within the same region.
The risk is clear: digital exclusion. As Nepal rushes toward a cashless future, we must confront a critical question — are we building a digital economy that serves everyone, or one that caters only to the few privileged population in cities and tech-savvy while the rest watch from the sidelines?
As Former Foreign Minister Gyawali acknowledges, “The gap is real, driven largely by low digital literacy and, in many cases, poor network connectivity. I have personally experienced this — once, while trying to book a transportation ticket to Kathmandu, my payment failed due to a poor signal, and I missed an important meeting. This divide can be narrowed if the government invests consistently in better digital infrastructure and prioritizes digital literacy.”
A 2022 study by the UN Capital Development Fund found that while 77 percent of Nepali adults own a mobile phone, only 26 percent actively use digital financial services — a gap driven less by the absence of technology than by the lack of digital confidence, education, and infrastructure. Kathmandu, Pokhara, Butwal, and Dharan are thriving hubs of the digital economy, yet just 10 to 20 kilometers beyond these cities, the picture changes sharply. According to the Digital 2024 and 2025 reports by DataReportal, Nepal’s internet penetration rose from 49.6 percent in early 2024 to 55.8 percent by early 2025 — or about 16.5 million users — but nearly half the population remains offline. The headline figure hides stark disparities: in many remote areas, 3G is still a luxury, and households often share connections or travel to nearby towns for a signal. In Karnali Province, smartphone penetration is below 45 percent, average broadband speeds are just 3.5 Mbps — a tenth of Kathmandu’s — and only 20.3 percent of households have internet access, far below the national average of 37.8 percent. A basic smartphone capable of running fintech apps costs Rs 10,000 to Rs 12,000, often equal to or exceeding a rural family’s monthly income.
“If technology only benefits the already connected, it risks deepening the social and economic divide,” Gyawali warned. “Our responsibility is to ensure that a farmer in any rural village can access the same digital tools as a shopkeeper in Kathmandu. Inclusivity must be the measure of our success.”
Nepal’s digital leap is real, but it must now become equal. The QR code taped to a momo stall in Kathmandu is a symbol of progress, but until a woman in Rolpa or an elderly man in Humla can use it with the same confidence and ease, the journey will remain incomplete.
Bridging that divide is not just about getting more devices into more hands — it’s about making those devices truly useful. My grandmother lives in a small town in Gandaki Province. When I showed her how I paid for our groceries using my phone, her expression was equal parts amazement and confusion. “When does the money actually reach that man’s hands?” she asked. It was a simple question, but it revealed a much larger issue: trust and understanding. Digital literacy is not just about knowing how to use an app; it’s about understanding the system behind it. For many elderly people, low-income workers, and villagers, digital finance remains abstract, unfamiliar, and at times suspicious.
Economist and Provincial Planning Commission member Dr. Sudan Kumar Oli emphasized that the core challenge lies not just in access, but in literacy. “You can have digital access, but what is more important is knowing how to use it,” he noted, stressing that infrastructure alone cannot drive adoption. Dr. Oli further pointed out that a lack of understanding of digital security systems continues to deter many potential users. “Without confidence in how to safeguard their transactions, people — especially those in rural areas — remain hesitant to embrace cashless systems, even when the technology is available to them.”
In Nepal, banks, wallets, and service providers still operate in fragments. Even among urban users, the scope of digital payments often stops at the basics. People may pay for tea with Khalti, but hesitate to book a domestic flight, invest in mutual funds, or secure a loan appraisal from the same app. A person who receives a remittance might cash it out from IME Pay but may not be able to pay a child’s school fees through that app if the institution insists on a bank transfer. True interoperability — allowing wallets, banks, and government services to communicate — is still a work in progress. An inclusive economy means more than access; it means empowerment: building trust among elderly and low-literacy users, creating interfaces in local languages, ensuring cyber safety and user protection, and designing apps that can function on low-end devices in low-connectivity zones.
Other countries have already shown what this kind of integration can look like. In China, integrated ecosystems mean you can scan a code to pay, take a loan, book a doctor, and donate to charity all within the same platform. By the end of last year, China recorded over one billion online payment users, with 974 million regularly shopping online. Mobile payments — dominated by Alipay and WeChat Pay — control over 90 percent of the market and process tens of trillions of dollars annually. By mid-2024, Alipay alone counted about 1.43 billion users and handled an estimated USD 18 trillion in transactions in 2023. These “super-apps” go far beyond payments, bundling ride-hailing, wealth management, lending, charitable donations, and utility bill payments into a single interface. Even the humble printed QR code has become an emblem of inclusivity in Chinese commerce, from street vendors to luxury malls. And now, China is piloting the digital yuan, with around 120 million wallets opened and over ¥1.8 trillion processed across 10 million merchants. The takeaway for Nepal is clear: minimize friction, integrate multiple services under one roof, and explore emerging tools like sovereign digital currency — but always anchor growth in trust, transparency, and universal access.
Gyawali said Nepal still has much to learn from its neighbors and that the government is “actively working to make 4G widely available in rural areas and aims to roll out 5G in major urban centers in the coming years.” Private sector players are also contributing to this goal, he noted, and “in a few years we might see this gap reduce significantly.”
As the digital economy grows, so do the risks. Online fraud in Nepal has skyrocketed, with cases jumping 87.8 percent in a single year to 7,723 — representing about 41 percent of all cybercrimes reported in FY 2024–25, according to official data. Users report phishing scams, fake payment confirmations, and fraudulent QR codes. Without swift, transparent mechanisms for dispute resolution, these risks undermine trust. Over-dependence poses another challenge: what happens when servers go down or someone loses their phone? And in an era where data is the new currency, questions of privacy loom large. Who owns our payment data? How is it stored, used, or shared? Without strong legal safeguards, the very tools meant to empower can become instruments of exploitation.
Dr Oli underscores that Nepal’s digital future also hinges on data sovereignty. “The prospects for the digital economy—and digital payments in particular—are the brightest if the government can establish a robust, domestically managed data storage system,” he said. Currently, Nepal relies heavily on foreign data servers, which store sensitive personal and financial data outside the country’s jurisdiction. “This not only raises concerns over privacy and security but also makes us vulnerable to external disruptions and foreign policy shifts,” he warned.
Former Minister Gyawali highlighted the same concern: “To achieve a truly inclusive digital economy, we need a clear national roadmap. This means investment in rural internet infrastructure, a unified QR system, strong consumer protections, and cooperation between government, banks, and fintech startups. If we act with urgency, Nepal can be a South Asian leader in inclusive digital finance within the next decade.” As he put it, “No country can advance without keeping pace with global trends, and today, the digital economy is one of the most important sectors globally. We are linked to the global production, supply, and value chains, and strong digital connectivity is essential for participation. A digital economy also lowers government costs and connects small businesses to larger markets, creating new opportunities for growth.”
Every time I scan a QR code in Nepal now, I think back to my first months in China. I remember feeling completely lost when I tried to pay for dumplings using WeChat, relying on friends to show me the way. Today, I see my friends in Kathmandu doing the same for their parents, teaching them to download eSewa, to pay electricity bills without queuing for hours. There is something deeply hopeful about this image. It suggests that we are not simply importing foreign models wholesale but adapting them to our own context, step by step.
Nepal’s digital leap is real, but it must now become equal. The QR code taped to a momo stall in Kathmandu is a symbol of progress, but until a woman in Rolpa or an elderly man in Humla can use it with the same confidence and ease, the journey will remain incomplete. The revolution is underway, but it is only half-won. The challenge — and the opportunity — lies in ensuring no one is left behind. Building this inclusive future, as both Former Minister Gyawali and Dr. Oli emphasized, will require not just devices and connectivity, but confidence, security, and digital self-reliance. Let’s finish what we’ve started. And let’s make sure we bring everyone along.
(Ms Baral holds a Bachelor’s degree from the University of International Business and Economics in Beijing)
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