Earlier this week, we reported that Nepal Rastra Bank is carrying out an internal discussion for an international payment system in the country. And yesterday, the issue was addressed in the first quarter review of monetary policy (2020-2021). Let’s dive deeper into the provision of an international payment system in the first quarter review of monetary policy.
An international payment system in Nepal
The topic caught some momentum when Maha Prasad Adhikari, the Governor of Nepal Rastra Bank, hinted that one could soon make payments in foreign currency for international products from Nepal. It was in response to a question put forward to him during the first session of the FonePay Digital Economy Conclave. The Governor assured that the central bank is serious on the matter and is working to develop a robust system for the same.
International payment in monetary policy
International Payment has been addressed in the first quarter review of Monetary Policy (2020–2021). The policy states an arrangement to provide foreign currency exchange facility up to a certain amount to import foreign goods and services via an online medium. This aligns with the Governor’s statement imposing a transaction limit of $500 for each individual. NRB will also be reviewing the fee that payment service providers are charging for electronic payment.
Present condition without an international payment system
Digital entrepreneurs and students will benefit the most from an international payment gateway. The major businesses in the world are making the transition to the cloud. But the ones based in Nepal are behind because of the payment restriction. There are few service providers with licenses for the same but not everyone has access to them. Thus, there is a need for a platform that allows the individual to make direct payments to international service providers
Similarly, the present condition has also given rise to frauds. People have to go through middlemen whenever they have to pay for international products. These middlemen charge heavy fees for each transaction. Some don’t even deliver goods after receiving payments. Some are selling trial versions of subscription-based products for premium prices. So, eliminating these middlemen and being in control of your own finances is a pretty big deal; and we can’t wait to see the system in action.
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