With the sharp slowdown in economic activities in the last one year, payments through electronic modes have also taken a beating in this fiscal year. From the beginning of the current fiscal year, there has been a gradual decline in electronic payment transactions every month. The latest statistics of the Nepal Rastra Bank (NRB) show that digital payments in the country have been continuously shrinking from mid-July to mid-December on a month-over-month basis. Generally, digital payments in Nepal pick up during the festive months of October and November as consumer consumption increases during these months. However, the festive season this year was mired in the economic slowdown impacting digital payments.

Also, the FIFA World Cup Qatar 2022, which took place from November 20-December 18, did not lift the consumption activities allowing sluggishness in digital payments to continue.

Digital transactions in Nepal took a giant leap after the start of the Covid-19 pandemic in early 2020 which forced people to stay inside their homes during the lockdowns. Backed by the increasing use of smartphones, consumers were fast to adopt digital modes of payments and online shopping to buy daily essential items. The monthly digit payments reached an all-time high of Rs 6,227.648 billion in the last month of FY 2021/22. However, electronic transactions have been on a decline every month in this fiscal year. The NRB data shows digital payments worth Rs 5,688.626 billion took place in Shrawan (mid-July to mid-August), Rs 4,926.715 billion in Bhadra (mid-August to mid-September), Rs 4,605.316 billion in Ashoj (mid-September to mid-October), Rs 3.946.194 billion in Kartik (mid-October to mid-November) and Rs 3,697.658 billion in Mangshir (mid-November to mid-December). Similarly, the real-time gross settlement (RTGS) has shrunk to Rs 2,436.541 billion in Mangshir (mid-November to mid-December) from Rs 4,349 billion in Ashar (mid-June to mid-July). Internet banking transactions stood at Rs 1,1.476 billion in Mangsir, down from Rs 15.638 billion in Ashar. In the meantime, cash withdrawals from automated teller machines (ATMs) declined to Rs 75.224 billion during the review period from Rs 79.459 billion in Ashar. Mobile banking transactions went down to Rs 160.036 billion from Rs 162.255 billion. Wallet transactions have also declined to Rs 17.730 billion from Rs 17.752 billion. However, Quick Response (QR) payments increased to Rs 19.346 billion from Rs 14.526 billion. Transactions made through the point of sales (POS) decreased to Rs 4.459 billion from Rs 5.183 billion. Digital payments were on an increasing trend till the last fiscal year. This trend has reversed in the current fiscal year. Bankers and experts point out the current economic slowdown for this. According to them, the spending capacity of consumers has been hard hit by rising inflation resulting in a decline in digital payments. According to Sanjeev Subba, CEO of Nepal Electronic Payment System (NEPS), as economic activities slowed down, the direct impacts have been seen in electronic transactions. Guru Prasad Paudel, Chief of Payment System Department at NRB says the decline in digital payments is a reflection of the contraction in economic activities. "While we directly cannot say digital transactions are on the decline, the slowdown in economic activities, the prolonged liquidity crunch, and other problems have affected digital transactions," he said. Box Electronic Payment Transactions

Month	Amount	Change
Mangshir (mid-November to mid-December	Rs 3,697.658 billion	-6.29%
Kartik (mid-October to mid-November)	Rs 3,946.194 billion	-14.31%
Ashoj (mid-September to mid-October)	Rs 4,605.317 billion	-6.52%
Bhadra (mid-August to mid-September)	Rs 4,926.715 billion	-13.39%
Shrawan (mid-July to mid-August)	Rs 5,688.626 billion	-8.65%
Ashar (mid-June to mid-July)	Rs 6,227.648 billion

Source: Nepal Rastra Bank