Kathmandu – The government has prepared a draft amendment to the Payment and Settlement Act, 2018 to allow foreign companies to obtain licenses for operating payment systems and providing payment services in Nepal, similar to domestic firms such as PhonePe, eSewa, and Khalti.

Currently, nine companies, including PhonePe, Nepal Clearing House, and Visa, are licensed as payment system operators in Nepal, while 23 companies, including eSewa and Khalti, are licensed as payment service providers. The Ministry of Finance has drafted amendments that would permit foreign companies operating in at least 10 countries to apply for licenses through Nepal Rastra Bank (NRB) if they wish to conduct payment-related business in Nepal.

The ministry stated that the amendment aims to modernize Nepal’s payment ecosystem, increase competition, and enhance financial services by making them more secure, accessible, and reliable for citizens. The draft has also been opened for public feedback and suggestions.

At present, the law restricts licenses to domestic companies only. The proposed amendment would explicitly allow foreign players such as Visa and Mastercard—already operating in Nepal as system operators—to obtain formal licenses under Nepali law.

Finance Ministry officials said the revision is also necessary to address challenges faced during implementation of the existing law and to update regulatory provisions. The Act empowers NRB to license, regulate, supervise, and take enforcement actions against payment system operators and service providers.

The draft also proposes new provisions, including:

• Refund obligation: Companies whose licenses are revoked or not renewed must refund customers’ e-money balances within 30 days, ensuring trust and reliability in digital payments.
• Dispute resolution: Responsibility for resolving disputes between payment service providers would be assigned to the NRB Deputy Governor heading the relevant department, replacing the current arrangement where the committee is chaired by a Finance Ministry Joint Secretary. The NRB’s Chief of Legal Division would also join the committee, while existing members such as the Deputy Auditor General and NRB’s Executive Director of the Payment Systems Department would remain.

NRB spokesperson Kiran Pandit said, “Foreign companies like Visa and Mastercard are already operating as payment system operators in Nepal. The amendment is simply to make licensing provisions clearer in law.”

The government had announced in its FY 2025/26 budget (point no. 322) that timely reforms would be made to laws related to NRB. The ministry emphasized that in today’s digital era, payment systems must be fast, safe, transparent, and reliable, as they play a fundamental role in economic growth and the functioning of the financial system.