Nepal's leading payment service providers, IME Pay and Khalti, have signed a merger agreement, marking the first such merger in the country's digital payment sector.

According to sources at IME Pay, the two companies signed the agreement on Sunday and have jointly applied to Nepal Rastra Bank (NRB) for regulatory approval. The merged entity is expected to be named IME Khalti.

While the merger agreement has been finalized, the share swap ratio has yet to be determined. However, sources indicate that a 1:1 share swap ratio, where both companies receive equal ownership, is a strong possibility.

The NRB paved the way for mergers between digital wallet companies by amending the Payment and Settlement Bylaws 2077. NRB Spokesperson Ramu Poudel stated that the central bank introduced this policy to encourage merger and acquisition, focusing on improving service quality rather than increasing the number of service providers.

“The central bank is ready to grant merger approval to companies that meet the required criteria,” Poudel said. “If the two companies have submitted an application, we will take the necessary steps accordingly.”

IME Pay, backed by IME Group, was the first company to obtain a license to operate a digital wallet in Nepal. Meanwhile, WorldLink and Sparrow SMS have invested in Khalti.

In terms of financial strength, IME Pay has a paid-up capital of Rs 300 million, significantly higher than Khalti's Rs 50 million. On the user front, Khalti has been downloaded five million times on Google Play Store, whereas IME Pay has one million subscribers.