What Nepal Can Learn From India's UPI and Bangladesh's bKash

Why Nepal Doesn't Need to Reinvent This From Scratch

Nepal doesn't have to guess how digital payments scale to hundreds of millions of people — two of the most studied case studies in the world are sitting right next door. India's UPI has grown into the world's largest real-time payments system, processing over 21 billion transactions a month and accounting for roughly 85-90% of India's total digital payment volume. Bangladesh's bKash took a completely different route to a similarly staggering outcome, becoming so dominant that its name is now used generically for "sending money," with tens of millions of active users built largely on the back of human agents rather than app downloads alone.

Both are genuine success stories, but they succeeded through almost opposite strategies. Understanding both — what worked, and where each one still struggles — gives Nepal a much sharper set of choices than copying either one blindly.

What India's UPI Got Right: Treat the Rail as Public Infrastructure

UPI's defining decision was architectural, not commercial: the National Payments Corporation of India built it as shared, interoperable public infrastructure rather than a single company's product. Any bank, and any app built on top of it — PhonePe, Google Pay, Paytm — can plug into the same underlying rail, and a payment sent from one app lands correctly regardless of which app or bank the recipient uses. That single decision is why UPI grew from 21 participating banks at launch in 2016 to over 700 today, and why it now processes payments as small as a roadside tea stall purchase and as large as major business transfers on the exact same rail.

Two other decisions mattered nearly as much. First, a zero-merchant-discount-rate policy meant merchants pay no transaction fee to accept UPI payments, removing the single biggest barrier that normally keeps small vendors on cash. Person-to-merchant payments now make up roughly 62-63% of UPI volume, and 86% of those merchant payments are under Rs 500 — proof that free, frictionless small payments is what actually drives daily habitual use, not big-ticket transfers. Second, UPI kept the user experience radically simple: a phone number or a simple payment ID linked to a bank account, no need to separately register with every vendor or app.

What Bangladesh's bKash Got Right: Solve the Last Mile With Humans, Not Just Apps

bKash took the opposite approach to distribution. Rather than betting on smartphone and app adoption first, it built its growth around an enormous network of human agents — small shopkeepers and vendors spread across nearly every corner of Bangladesh, functioning as informal human ATMs where users could cash in and cash out with someone they already knew and trusted locally. This mattered enormously in a country where rural trust in unfamiliar digital systems was low and smartphone ownership wasn't universal; a farmer or garment worker didn't need to understand an app interface, just walk to a familiar local agent.

The results speak for themselves: Bangladesh's overall financial inclusion rate rose from around 37% in 2004 to over 77% in the years following mobile financial services' introduction, and bKash alone now serves tens of millions of active users, with the broader mobile financial services sector in Bangladesh surpassing 190 million registered accounts. Backing from institutions like the IFC and early investment attention from the Gates Foundation helped validate and scale the model early, and it's since been cited by the World Economic Forum as a global benchmark for digital financial inclusion.

Where Each Model Still Struggles

Neither system is a perfect template, and both have real weaknesses worth learning from as much as their strengths.

UPI's weakness is that it required an enormous, coordinated national investment to build — a dedicated national payments corporation, hundreds of participating banks agreeing to a shared standard, and years of government-backed push through initiatives like Digital India. That kind of scale and coordination is genuinely difficult for a smaller economy to replicate quickly.

bKash's weakness is interoperability — or the lack of it. Unlike UPI's shared rail, Bangladesh's mobile financial services largely operate as separate, closed-loop systems; a bKash user often can't send money as seamlessly to a Nagad or Rocket user as a UPI user can send to any other bank. That fragmentation, even with bKash's dominant market position, means the ecosystem never achieved the kind of universal, provider-agnostic simplicity UPI has.

What Nepal Is Already Building Toward

Nepal isn't starting from zero here. Nepal Rastra Bank's National Payment Switch, operated by Nepal Clearing House Limited, is explicitly modeled on the same interoperability principle UPI proved out — a shared NEPALPAY QR standard designed to let wallets and banks interconnect rather than operate as separate closed loops, which is precisely the fragmentation problem bKash's ecosystem still hasn't fully solved. Nepal's e-wallet user base has also grown dramatically, from around 6.2 million in 2020 to roughly 23.5 million by 2024, showing genuine appetite for digital payments already exists. And notably, UPI itself already operates in Nepal on a reciprocal basis, letting Indian visitors pay Nepali merchants directly with UPI — a live, working example of interoperability that Nepal's own domestic system can learn from directly.

Five Concrete Lessons for Nepal

• Prioritize interoperability over any single provider's growth. The NPS is the right instinct — keep pushing every wallet and bank toward one shared standard rather than letting closed loops harden the way they did in Bangladesh.
• Make small merchant payments genuinely free. UPI's zero-MDR policy is arguably its single biggest adoption driver — if scanning a QR code to pay a vendor costs the vendor nothing, digital payment becomes the path of least resistance rather than a favor to the customer.
• Don't skip the human agent layer. Nepal's rural and non-smartphone population needs what bKash's agents provided Bangladesh — a trusted local human point of contact for cash-in and cash-out, not just an app download, especially while USSD and voice-based channels are still maturing.
• Keep the user experience radically simple. UPI's success rests partly on requiring almost nothing to learn — a phone number or ID linked to a bank account. Every added step in onboarding or transacting is a point where adoption quietly drops off.
• Treat the payment rail as shared infrastructure, not a competitive product. The institutions building Nepal's core payment infrastructure benefit everyone more by staying neutral and interoperable than by trying to compete directly with the wallets and banks that plug into them.

The Bottom Line

UPI proves that a single, simple, interoperable public rail can become the default way an entire country pays. bKash proves that trust and physical reach matter just as much as technology, especially where digital literacy and smartphone access remain uneven. Nepal doesn't need to choose one philosophy over the other — the National Payment Switch is already pointing toward UPI's interoperability model, and there's still room to lean further into bKash's agent-based trust-building for the parts of the country digital-first design alone won't reach. The real lesson from both isn't a specific feature to copy — it's that the countries that got this right treated digital payments as a shared, boring, universally accessible utility, not a flashy product to win market share with.