Let’s consider a world without paper money or coins. All of our transactions are done on digital platforms. Khalti, eSewa, fonepay, PrabhuPay, QR Nepal. It wouldn’t be inaccurate to claim that the number of people who have selected a digital wallet is increasing. Also, the Covid-19 outbreak has caused worry of spreading infection owing to increased possibility of contact while using paper money.
After the 23rd of March, there was a substantial increase in the number of mobile banking customers. Before the epidemic, monthly banking and financial statistics from Nepal Rastra Bank saw an increase from 9,806,237 to 12,689,445, whereas one year into the pandemic, they grew from 9,806,237 to 12,689,445. Mobile banking customers saw a 29.4% increase after the lockout. E-commerce enterprises have witnessed an increase in prominence in this time period.
People were able to take advantage of internet payments over cash. It streamlined how individuals could make payments with grocery bills, school fees, and internet service subscriptions all in one click, saving time and exposure to the virus. To lessen the inconvenience that was created by Covid-19, banks lifted the cap on card, POS, smartphone, internet, and QR code transactions, as well as other digital transactions.
Mobile banking transactions account for 40 billion; wallet transactions account for 10 billion; internet banking transactions account for 8 billion; QR-based payments account for 2 billion; and point of sales (POS) transactions account for 3 billion.
Thus, our economy is still cash-dependent. Currently, we’ve mostly done cash transactions. However, with a broadband internet penetration rate of 72.98%, which is up 10.79% from last year, there is optimism for more access to cashless transaction methods. A key component of this transition is strong policies.
According to the Monetary Policy 2020/2021, financial transactions would be facilitated following the implementation of the Digital Nepal Framework, which intends to promote sound and secure electronic payment systems to limit cash transactions. The guideline will also call for the use of QR codes to manage electronic payments. We may argue that Nepal is on its way to a cashless economy as a result of the foregoing information.
Despite digital platforms are garnering positivity, paper money remains stable. People are used to seeing money physically in their hands, and hence are hesitant to use electronic or online payment systems. However, at first, people are unlikely to go back to using cash. A robust level of security must be taken into consideration when conducting online transactions.
Sometimes cash transactions are not recorded. Every transaction conducted on the particular platform is logged, giving an upper hand to the digital wallet sector. With the mass use of electronic or online payment, is the cash-based economy going to completely transition into a cashless one?