Nepal Breaking NewsFintechIn Nepal, QR code payment is becoming increasingly common

In Nepal, QR code payment is becoming increasingly common

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  • Due to the social distancing caused by the Covid-19 pandemic, QR code payment is gaining traction.
  • The Nepal Rastra Bank has released a draft of QR Code Guidelines, Framework, and Specifications, which emphasizes three main payment principles: interoperability, scalability, and security.
  • QR code payment has a bright future thanks to the evolution of digital payment channels and rising user demand for e-payment.

In Nepal, the QR code has recently revolutionized digital payment services. Many citizens have begun to favor digital platforms for online financial transactions, such as e-wallets, mobile banking, and various other payment service operators (PSOs) and payment service platforms (PSPs).

Several large and small businesses, ranging supermarkets to grocery stores, restaurants, and street vendors, are now accepting QR code payments. Customers can pay by scanning a QR code, which they find to be the most convenient method of payment.

What is the QR code system?

A two-dimensional barcode with black squares arranged within a square grid on a white background is known as a quick-response (QR) code. The code contains -readable information can be accessed using a QR code scanner or the on a smartphone.

A QR code system was invented by a Japanese company in the 1990s and was first used in the automotive industry. It is now widely used in a variety of industries around the world. The QR code system is being implemented in Nepal as well.

does QR code payment work?

QR code payment is as easy as scanning and paying; all you need is a QR code scanner or, to be more precise, a smartphone camera. The method of scanning a QR code, on the other hand, can differ depending on the services you’re using it for.

You may pay by scanning a product’s code, or retailers can accept payment by scanning a QR code on your phone that contains your credit card information.

choose QR code payment?

QR code payment is more just a convenient way to pay. Aside from instant payment, it has a number of other benefits, including high security, of setup, and high reliability.

Since you don’t have to share any sensitive information like credit cards when paying with a QR code, it’s extremely safe. In the code, all of our sensitive information is encrypted. It can be a cost-effective replacement for point-of-sale infrastructures by removing the need for specialized billing equipment.

It also reduces the risk of technological failures or software malfunctions while using credit cards, making them more dependable.

QR code usage in Nepal

In Nepal, the Covid-19 pandemic has improved the Scan and Pay service via QR code significantly. People who are worried about their personal hygiene endorse the contactless payment system. Fonepay, IMEPay, Khalti, QPay, and SmartQR, among other digital payment service providers, promote QR code payment by providing Scan and Pay services to their customers.

According to a report by the Nepal Rastra Bank, QR-based transactions totaled 372,176 from mid-December 2020 to mid-January 2021. The transactional sum was Rs 1.245 billion as well. The following month, the number of transactions to 535,790, with a total value of Rs 1.712 billion, indicating a strong increase in QR code payment use.

According to Subash Sharma, CEO of F1 Soft International, there are over 275,000 in Nepal who use QR codes for payment. 75,000 of them have been purchased by his business, eSewa Fonepay service. For QR code payment through mobile banking, Fonepay has partnered with more than 50 banks.

On January 27, 2021, the Payment System Department of Nepal Rastra Bank published QR Code Guidelines, Framework, and Specifications in order to facilitate QR-based payment. Furthermore, the Nepalese government has begun the process of opening a bank account via the Nagarik app. By scanning the QR code on the Nagarik app, you can now verify your identity when opening a bank account. This is a one-of-a-kind initiative by the Nepalese government, and it serves as a catalyst for the digital Nepal movement.

How secure is QR code payment in Nepal?

In several developing countries, there have been reports of adverse QR violations. Since QR codes are scribbled, they are almost impossible for humans to detect in the event of malice. Cybercriminals may create a fake QR code and replace it with one issued by a company. As a result, the code’s data is more vulnerable to cyber theft.

The good news is that Nepal is still in the early stages of its digital economy, with QR payments being a novel idea. Since few people are aware of its programs, they are less likely to use an unauthorized QR code. Furthermore, with the implementation of highly influential computer programs and cyber policies, cybersecurity is making significant progress.

Major uses of QR code in Nepal

QR codes can be used in a variety of goods and services, such as department stores and small shops, as well as many banks and financial institutions (BFIs). A digital wallet can be used to make purchases in supermarkets using a QR code scanner. QR codes are also being used by local vendors and shops for fast payment. For grocery shopping, QR codes are also available at fruit and vegetable markets.

Restaurants and cafeterias are two other places where QR codes are commonly used. It allows you to browse the menu and orders directly from your phone. This prevents the use of a physical menu, which can serve as a disease-transmission agent due to person-to-person transmission.

You can pay your bill using a QR code and make a contactless payment. Similarly, many online food delivery sites, such as Foodmandu, have begun to embrace QR code payments.

Commercial banks such as Prabhu Bank Limited and Nabil Bank Limited have begun offering QR payment services to vendors in markets such as Kalimati Fruit and Vegetable Markets and Kuleshwor Fruit Market.

Future and challenges of QR code Payment in Nepal

For several years, retailers and customers have relied on cash as their primary method of payment. Switching to some kind of e-payment service, such as QR codes, will be a lengthy process. Consumers, on the other hand, are becoming more interested in digital payment as a means of ensuring secure transactions and avoiding physical interaction as much as possible.

To promote the use of such sites, PSOs such as eSewa have been offering QR payment services without charging any extra fees during transactions. Around 64.65% of Nepal’s total population is expected to be financially active between the ages of 15 and 64. Since this generation has access to a variety of media that can raise awareness of the importance of digital payments, the number of users is expected to dramatically increase in the future.

QR code payment systems have the potential to transform the informal economy into the formal economy. However, Nepal can fully realize the benefits of e-payment, it must address a number of infrastructural and behavioral issues. The number of internet users is rapidly increasing, but it is still insufficient to support an established digital economy.

Another big problem for a robust digital payment service is interoperability. Rapid expansion of many PSOs and PSPs can cause an imbalance in the digital economy’s ecosystem. A unified payment switch is needed to avoid this stumbling block.

Users can connect different PSPs’ QR payment services using the same application using a framework like Smart QR built by the private tech sector. QR switching technology will in the creation of an interoperable network and the facilitation of e-payments.

In the end..

QR code payment has the potential to help Nepal’s digital economy develop. The government’s increased emphasis on digital payment systems, as well as the central bank’s promotion of this system, could give QR code payment a head start.

This transition can also be influenced by mass awareness campaigns and promotional events. Infrastructure growth, such as high-speed internet access and increased user accessibility, must be taken into account. Payment service providers, payment service , banks and financial institutions, and traders can collaborate to make their digital payment systems more interoperable.

The ultimate aim should be to provide customers with a one-stop shop for all types of e-payment services, including QR code payment.

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