History of Digital Payments in Nepal: From 1990 Nabil Credit Cards to Today

A single plastic card issued in 1990 didn't look like the start of anything revolutionary. Thirty-six years later, that first cautious step has become a country where a QR sticker on a tea stall counter can settle a payment in under two seconds.

1. 1990–1995: The Analog Beginning

Nepal's digital payment story doesn't begin with a smartphone — it begins with a piece of plastic. In 1990, Nabil Bank (then Nepal Arab Bank, established in 1984 as Nepal's first joint-venture private bank) issued the country's first credit card. It was a modest milestone by today's standards: the card worked for international transactions only, was available to a tiny sliver of the population, and had no domestic acceptance network to speak of. Cash, checks, and in-person bank branch visits still ran the entire economy.

Five years later, in 1995, Himalayan Bank introduced Nepal's first ATM alongside a domestically usable credit card, finally letting cardholders transact within the country rather than only abroad. Even this was a slow-burning change — ATM density stayed thin for years, and most Nepalis had never touched a card, let alone a machine that dispensed cash without a teller.

2. 2002–2006: Banks Go Digital, One at a Time

The early 2000s saw individual banks experimenting with their own digital channels, largely in isolation from one another. Kumari Bank introduced Nepal's first internet banking (e-banking) service in 2002, letting customers check balances and statements online rather than requiring a branch visit for every inquiry. Two years later, in 2004, Laxmi Bank launched the country's first SMS-based mobile banking service — a genuinely useful convenience given how far ahead mobile phone adoption was of home internet access at the time.

Around the same period, Smart Choice Technology (SCT) was established to address a structural problem: every bank's cards and ATMs operated as isolated islands. SCT built a shared switching network that let cards from different banks work across a common ATM infrastructure — an early, limited precursor to the full interoperability Nepal would eventually build two decades later. Adoption during this entire era remained slow. Digital banking tools existed, but most customers used them narrowly, mainly to check statements, and it took years for basic transactional use to become normal.

3. 2009: eSewa and the Wallet Revolution

Everything up to this point had still required a formal bank relationship — a card, a linked account, a branch somewhere in the chain. eSewa changed that equation in 2009 by launching Nepal's first digital wallet that didn't require users to hold a traditional bank account at all. For the first time in the country's payment history, a transaction could be initiated and completed entirely outside the direct involvement of a bank or financial institution — sending money, paying a bill, or receiving funds directly through a mobile phone and an internet connection.

This was the real inflection point. Card banking had been a service banks offered to existing customers; eSewa was a product built for anyone with a phone, regardless of their banking relationship. It planted the seed for the wallet-first model that would come to define Nepal's digital payments landscape over the following fifteen years.

4. 2017–2018: The Wallet Wars and connectIPS

After nearly a decade of eSewa operating with limited direct competition, 2017 brought Nepal's wallet market to life. Both Khalti and IME Pay launched that year — Khalti in January 2017, backed by a group of co-founders and later institutional investors, and IME Pay as a mobile money initiative under the established IME Group, leveraging its existing remittance network. For the first time, Nepali consumers had a genuine choice of competing wallet platforms, each racing to sign up merchants, banks, and users.

The following year, in October 2018, Nepal Clearing House Limited (NCHL) — a company promoted by Nepal Rastra Bank — officially launched connectIPS, a standardized platform enabling direct, real-time payments from a user's own linked bank account rather than a separate wallet balance. connectIPS represented a different philosophy from the wallet model: instead of holding funds inside a third-party app, it let banked customers pay directly from their existing accounts across any participating institution, initially piloted through government revenue collection before expanding to peer-to-peer transfers and biller payments.

5. 2019–2021: Regulation Catches Up, Then COVID Forces the Issue

By the late 2010s, Nepal's digital payment landscape had grown faster than its regulatory framework. That began to change with the Payment and Settlement Act, which established formal legal categories — Payment System Operators (PSOs) and Payment Service Providers (PSPs) — bringing wallets, switches, and payment networks under direct Nepal Rastra Bank licensing and oversight rather than operating in a comparatively loose regulatory space.

Then came a shock no policy roadmap had planned for: the COVID-19 pandemic. Contactless payment suddenly went from a convenience to a public health necessity, and QR code payments — until then a niche feature — became the fastest-growing payment method in the country almost overnight, as both merchants and customers sought to avoid handling cash. Regulators and payment operators had to accelerate infrastructure that might otherwise have taken years to reach mainstream adoption.

Nepal Rastra Bank formalized this shift in November 2021 by handing operational responsibility for the country's first-phase National Payment Switch (NPS) to NCHL, with 29 banks and financial institutions signing on for the initial rollout. This was Nepal's first serious attempt at government-mandated, systemic interoperability — a single piece of infrastructure designed to let any participating bank or wallet talk to any other, rather than leaving interoperability to whichever private network grew large enough to force the issue.

6. 2022–2024: Interoperability Becomes the Standard

With the pandemic-driven QR boom now permanent consumer behavior, Nepal Rastra Bank moved to standardize and secure it. The NepalQR Code Standardization Framework and Guidelines set uniform technical and fraud-prevention requirements across every licensed QR provider, and barred providers from charging customers any fee for using QR payments — removing a friction point that could have slowed adoption at exactly the moment it was accelerating.

This period also saw Nepal's payment infrastructure begin looking outward. UPI-Nepal integration went live, eventually processing more than a million transactions and laying groundwork for peer-to-peer cross-border remittance flows — a meaningful development given how central remittances are to Nepal's economy. Domestically, June 2024 brought the first-ever consolidation of Nepali payment system operators, when NCHL completed its acquisition of Nepal Electronic Payment Systems (NePS), bringing card processing and non-card payment infrastructure under a single institutional roof for the first time and setting up the technical foundation for a fully domestic card scheme.

7. 2025–2026: Consolidation and a Truly National Infrastructure

The most recent chapter of this story is as much about consolidation as it is about new technology. In February 2025, Khalti and IME Pay — two of Nepal's most prominent independent wallets — signed an agreement to merge, made possible by an NRB regulatory amendment specifically permitting digital wallet mergers. That merger completed in July 2025, launching as "Khalti by IME" with a combined user base exceeding 12.7 million, instantly becoming one of Nepal's largest digital wallets and marking the country's first-ever wallet consolidation.

Then, in early 2026, Nepal crossed a genuine sovereignty milestone: the launch of the NEPALPAY Card, the country's first fully domestic payment card scheme, built on the NPS-National Card Switch infrastructure. For the first time, Nepali banks could issue debit and credit cards that route and settle transactions entirely within the country, rather than depending on international card networks and their associated foreign routing fees — demonstrated live when a NEPALPAY card issued by one bank was successfully used at a completely different bank's POS terminal and ATM. Just weeks later, in May 2026, Nepal extended its payment reach beyond its own borders, launching cross-border QR interoperability with Sri Lanka, letting Nepali travelers pay Sri Lankan merchants directly through their own domestic banking apps — a small but symbolic sign that the same interoperability principle that took thirty years to build at home is now being extended internationally.

8. Full Timeline at a Glance

9. Frequently Asked Questions

What was Nepal's first digital payment product?

Nabil Bank's 1990 credit card is generally considered the starting point of digital payments in Nepal, though it was limited to international transactions. Himalayan Bank's 1995 ATM and domestic card marked the first digital payment products usable within the country itself.

What made eSewa different from earlier digital banking products?

Every digital product before eSewa still required a formal, direct bank account relationship. eSewa, launched in 2009, was Nepal's first payment product that let users transact digitally without needing a traditional bank account at all, opening digital payments to a much broader population.

Why did QR payments grow so quickly in Nepal specifically around 2020?

QR-based payment technology already existed before 2020, but the COVID-19 pandemic created sudden, widespread demand for contactless transactions as both merchants and customers sought to avoid handling cash, compressing years of expected adoption into a much shorter window.

Is Nepal's digital payment infrastructure now fully domestic?

Largely, yes, for the newest infrastructure. The 2026 launch of the NEPALPAY Card gave Nepal its first fully domestic card scheme, processing transactions entirely within the country rather than routing through international card networks. Older card products issued under international schemes like Visa, Mastercard, and UnionPay remain in wide use alongside it.