Nepal has started testing its own payment switch and card system, in a bid to reduce reliance on foreign companies that charge high fees for card payment services.
Nepal Clearing House Limited (NCHL), an institution backed by Nepal Rastra Bank (NRB) and various banks and financial institutions, officially introduced the "NPS–National Card Switch" (NPS-NCS) and the "Domestic Card Scheme" (Nepal Pay Card) on Monday.
NRB approved NCHL to operate the National Payment Switch three years ago as part of Nepal's strategy to develop an independent payment system. In the first phase, NCHL launched the retail payment switch, facilitating transactions for mobile wallets, capital markets, insurance, remittances, the Employees Provident Fund, the Citizens Investment Trust, the Social Security Fund, large corporations, and the Government of Nepal. The newly launched card switch and Nepal Pay Card mark the next phase in this initiative.
Branded with the slogan "Nepal’s Own Card," the card was unveiled by NRB Governor Maha Prasad Adhikari. Currently, Citizens Bank, Himalayan Bank, Machhapuchhre Bank, Prabhu Bank, and Siddhartha Bank have signed agreements to issue Nepal Pay cards, while Muktinath Bikas Bank, Shangri-La Development Bank, and Goodwill Finance are also set to introduce them.
NCHL CEO Nilesh Man Singh Pradhan stated that the card switch system and necessary certifications for banks and financial institutions will be fully operational after integration. He added that while Nepal Pay cards are currently usable only within Nepal, they will be upgraded to international standards in the future.
At present, commercial banks in Nepal offer card payment services through international providers such as Visa, MasterCard, and UnionPay, incurring significant transaction fees. Governor Adhikari emphasized that Nepal Pay cards will lower these costs, making electronic transactions more affordable. "The cost of electronic transactions has been high as payments are being processed through international service providers like Visa and MasterCard," he said. "Now, operating a domestic card system will reduce expenses."
NCHL currently manages various national payment systems, serving over 54 banks and financial institutions, along with payment service providers (PSPs), payment system operators (PSOs), and more than 100 non-banking entities. The company reports an annual transaction settlement exceeding Rs 15.5 trillion.
Electronic transactions are rising in Nepal, driven by government policies, increasing technological access, and growing consumer adoption. According to NRB data, monthly electronic transactions exceed Rs 5 trillion, with Rs 5.71 trillion recorded in the latest figures.
