The Asian Development Bank (ADB) has highlighted the Nepal-India digital payment corridor as a significant untapped potential that could greatly enhance trade, tourism, and remittance flows between the two countries. In a recent report titled ‘Advancing Digital Payments in Nepal: Infrastructure Upgrades and Policy Development for Enhanced Trade Facilitation,’ the ADB emphasized that despite billions of dollars moving annually between Nepal and India through trade and remittances, most transactions still rely on traditional banking channels rather than digital payment systems.
The report quoted Nepali fintech expert Sanjib Subba, stating that the economic relationship between India and Nepal presents a largely unexplored digital payment opportunity. It suggested that an interoperable payment infrastructure could bring efficiency gains for businesses and consumers in both nations. The ADB recommended enhancing cross-border payment infrastructure, regulatory alignment, payment system interoperability, and market integration to strengthen Nepal’s digital payment ecosystem and bolster its role in trade facilitation.
To further develop the digital payment system, the report proposed measures to fortify domestic infrastructure and institutional capacity. It also advocated for an implementation framework that prioritizes coordinated governance and stakeholder engagement. Additionally, the report highlighted the successful integration of Nepal’s National Payments Interface with India’s Unified Payments Interface (UPI) following regulatory terms of reference signed by Nepal Rastra Bank and the Reserve Bank of India in 2024.
