With the contraction in economic activities, high-volume digital payments have seen a steep decline in the current fiscal year. While the growth of retail digital payments is steady, the high-volume digital payments carried out mainly through the Real Time Gross Settlement (RTGS) are in a decreasing trend. The latest statistics of the Nepal Rastra Bank (NRB) statistics show RTGS payments plummeted by 15.35 percent in the 10 months of FY 2022/23. In the review period, the settlements amounted to Rs 28,553.37bn compared to Rs 33,734.28bn during the same period of the last fiscal year. An RTGS is a funds transfer system in which the transfer of funds between one bank and another takes place in ‘real-time’ and on a ‘gross’—transaction by transaction basis.

The NRB data shows RTGS transactions increased in the first three months (Shrawan, Bhadra, and Ashoj) of the current fiscal year, then started to decline gradually. In Baisakh (mid-April to mid-May), RTGS transactions declined by 39.21 percent to Rs 2,429.91bn which was Rs 3997.68bn a year ago.

According to Guru Prasad Paudel, Head of the Payment Systems Department of the NRB, the slowdown in economic activities affected the RTGS transactions this year. “There has been a decrease in the payment of large sums of money due to contraction in economic activities,” he said, adding, “The downturn has resulted in a decrease in large financial transactions which has been reflected in the RTGS.” As high volume transactions have declined, NRB said that the decline in RTGS has affected the overall digital payments in this fiscal. However, retail payments through wallets, QR codes, mobile banking, and ConnectIPS surged in the current fiscal year, according to NRB. 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 downtrend. According to them, large businesses are reluctant to spend as market demand for several kinds of goods and services has remained sluggish in the current fiscal year. According to NRB, overall digital payment has declined by 11.79 percent in the 10 months of FY 2022/23. Payments through electronic modes have been gradually declining every month since the start of this fiscal year. The NRB data shows digital payments amounted to Rs 42,226.775bn in the review period compared to Rs 47,873.323bn during the same period of FY 2021/22. 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 with e-commerce and POS transactions gaining prominence. Post-pandemic, digital platforms including connectIPS, e-wallets, mobile banking, internet banking, QR codes, and bank cards are being used widely as customers can use these instruments in self-service mode.