In the past one decade Nepal has significantly progressed in the internet and communication sector. While 10.21 million Nepalis have access to the internet, almost a million use e-banking facilities.
But Nepalis are yet to realize the internet’s full potential. Be it gamers, students or any other professionals, they have at some point in time come across content that they desperately need, but is behind a paywall. Nepali banks, until now, didn’t issue cards that could be used to make international online payments.
During the Covid-19 lockdown, most people had no other option but to do their work online, and this required subscription-based services. But it was not possible to pay for those services with a card issued by your own bank.
The problem has now been resolved, at least to an extent. Nepal Rastra Bank has now made it possible for Nepali banks to provide prepaid dollar cards to customers for online transactions.
The central bank now allows ‘A’ class commercial and ‘B’ class development banks to provide the service.
“Although we received a lot of inquiries, the second wave of Covid-19 has affected card-issuance,” says Binay Regmi, deputy head of Digital Banking at Machhapuchchhre Bank.
NRB has limited the use of the dollar card to buy goods and services worth a maximum of $500 annually. Any individual or firm can easily get a dollar card if they have a PAN and an up-to-date KYC at the respective bank.
“It can only be used for international online transactions whereas cash advances and manual retail transactions are restricted,” says Bisal Subedi, associate at Standard Chartered Bank.
Different banks have branded their cards with different names. For instance, Sunrise calls its card E-card, Siddhartha eCom Card, Prabhu 500 Card, Nabil iCard and Kumari $eCom Card.
“The application process is similar to what you have to do while applying for an ATM card,” says 20-year-old Ashwin Rimal, who is happy to use the card to pay his university fees.
Krishna Subedi, corporate communications head at Nabil Bank, clarifies that banks don’t charge extra for the prepaid dollar cards. “There are no extra fees. It’s a regular card cost of around Rs. 1,000 for a four-year period.”
The new service has benefitted e-commerce and IT companies. Manish Khadka, who works as an accountant for a private company, shares, “Dollar cards have made it easier for me to buy domain and software.” He now wants banks to allow customers to load the card using e-banking.
Subedi of Standard Chartered informs that people can now purchase subscriptions of global OTT platforms such as Netflix and Spotify with a click. “This service will increase the reach of Nepalis to online markets such as Alibaba and Amazon.”
Pawan Lama from Gokarneshwor, Kathmandu, is a retail businessman who uses a dollar card to advertise his business on social media. He says, “Something is better than nothing. But I think NRB should have set the ceiling a bit higher.”.
The central bank has issued some regulations for the management of dollar cards. The banks have to provide details of monthly transactions to the Foreign Exchange Management Department. They also have to provide card and transaction details to respective customers, when asked. Those using two or more dollar cards will be punished under the Foreign Exchange Regulation Act (2019).
