International Payment Finally Allowed in Nepal; NRB Approves Nepalese Equivalent of Paypal and Payoneer

Nepalese users can now pay on their own for TOEFL/GRE tests, Netflix, Amazon, Online Ads, and many more. 

In point 66 of the review document of the first quarter of the fiscal year 2077/78, there was a statement that can be translated into:

"Arrangement will be done for currency conversion for limited purchase/ import of foreign goods and services."

In continuation of that initiation, NRB has now unveiled a descriptive document.

As of now, Nepalese credit/ debit cardholders could purchase foreign goods and services for domestic consumption totaling not more than $2,000 in a year. These goods and services had to be allowed for consumption by Nepal's laws. Apart from this, Nepalese consumers did not have any other means of international payment.

Meanwhile, commercial banks were allowed to make the payment on behalf of their clients. While they could pay for amounts up to $3,000 on the client's request, amounts higher than $3,000 and up to $10,000 needed the regulator's recommendation.

The Problem

In absence of a convenient means of payment for low-cost products and services, NRB has acknowledged the fact that many Nepalese have been using the Paypal and Payoneer cards of their relatives residing abroad. NRB has identified such activities as Digital Hundi and has confessed that the lack of a convenient payment system has exacerbated the situation. Digital Hundi has been causing Nepalese wealth to leave the country without it being traced by the government. Apart from giving a distorted view of the country's economy, such activities also hide the revenue/tax that the government deserves.

Furthermore, with the rising presence of brands and businesses on social media platforms, NRB has felt the need for a simple and efficient way to pay for social media ads. Everything from Domain Registration, Web Hosting, to App Subscription requires an international payment gateway. Thus, in order to prevent the growth of a Shadow Economy and to promote a transparent Digital Economy instead, NRB has introduced new provisions.

The Solution

Nepal Rastra Bank has approved the concept of a prepaid Dollar Card. With this, banks can now issue Prepaid Cards for international payment for goods and services. These are things to keep in mind:

1) Nepalese cardholders are allowed to deposit a maximum of $500 for the international payment.
2) The existing fund in the Nepalese rupee in the respective bank account can be converted to foreign currency for that purpose.
3) Payment can be done only for the purchase of goods and services allowed by Nepalese laws.
4) Only one card can be made for international payment from only one bank by an individual or entity. Usage of multiple cards from multiple sources is a punishable act.
5) KYC and PAN are needed to apply for the Prepaid card.
6) If the cardholder is found to have generated foreign income amounting to at least double the card amount of $500, additional funds may be deposited to the card. This can be considered as NRB's reward to the cardholder for generating international revenue for the country.

NRB's Official Document on this Issue