Imagine this: You’re a Nepali tourist in India, ready to pay for your favorite street food with a quick scan of your phone. No cash, no hassle. But wait… you can’t. Why? Because the much-anticipated QR code payment system for Nepalis in India has hit a roadblock. Let’s break it down in the simplest way possible.

What’s the Hold-Up?

Nepal and India had a brilliant plan: allow Nepalis to use QR codes for payments in India, just like Indian tourists already do in Nepal. But here’s the catch—every QR transaction comes with a small fee. And no one can agree on who should pay it. Should it be the Nepali banks, the Indian merchants, or the Nepali travelers?

Until this is sorted out, the system is stuck. Let’s dive into the details (don’t worry, we’ll keep it simple!).

How Do QR Code Payments Work?

Think of QR code payments as a digital handshake between your bank and the merchant’s bank. Here’s how it works:

1. You scan the code: At a shop or restaurant, you use your phone to scan a QR code.
2. Money is transferred: The amount is instantly deducted from your bank account and credited to the shop’s account.
3. Behind the scenes: Banks and payment operators handle the transaction, which costs them money. To cover this cost, they usually charge a small fee.

In India, QR payments are free for both customers and merchants, thanks to a government-mandated zero-charge rule. But Nepali banks want a share of the fee when Nepalis use QR codes in India, creating a standoff.

People from India Are Already Using Cross-Border QR Payments in Nepal

Here’s where it gets interesting. While Nepalis are still waiting to use QR payments in India, Indian tourists visiting Nepal have already started enjoying this convenience in Nepal.

Notably, on March 1, 2024, Fonepay and India's NPCI International Payments signed a Memorandum of Understanding (MoU) to facilitate such transactions.

Additionally, Nepal Clearing House Limited (NCHL) and NPCI signed an MoU to enable cross-border QR payments. However, as of December 2024, this service has yet to commence. The delay is attributed to pending approvals and unresolved fee-sharing agreements.

This feature has seen significant growth since its launch. In Asoj, Indian visitors used cross-border QR payments 43,906 times, with transactions totaling NPR 139 million, and this number increased to 50,455 in Kartik, amounting to NPR 156 million. It’s a win-win for Indian tourists and Nepali merchants, as it eliminates the need to carry cash or deal with currency exchange hassles.

But here’s the irony: while Indians are scanning QR codes in Nepal with ease, Nepalis still can’t do the same in India. This imbalance underscores the urgency of resolving the fee-sharing dispute to create a truly reciprocal system.

Why Does This Matter?

Let’s connect the dots to see why this issue is a big deal:

• For Travelers: Imagine Nepali students paying tuition fees in India or businesspeople settling bills without carrying wads of cash. QR payments would make life so much easier.
• For Trade and Tourism: Seamless payments could boost cross-border trade and tourism, strengthening ties between the two countries.
• For the Future: Digital payments are the way forward. Solving this issue could set an example for other cross-border collaborations.

The Numbers Behind the Issue

Here’s a quick snapshot of how things stand:

• In Nepal: Indian tourists using QR codes pay a small fee of 1.95% per transaction. This fee is charged to Nepali merchants.
• In India: QR payments are free for both users and merchants. For large transactions (above INR 2,000), a small fee (up to 1.1%) is charged to big businesses but not to small shops.
• The Problem: Nepali banks want a fee for transactions made by Nepalis in India, but Indian merchants aren’t used to paying such fees. This has caused a stalemate.

What’s Being Done?

Nepal and India have been working on this for over a year. Here’s what’s happened so far:

• Successful Trials: Nepal’s Fonepay tested the system in Mumbai, and it worked flawlessly.
• Agreements Signed: Both countries agreed to launch cross-border QR payments in 2023. But approvals and fee-sharing agreements are still pending.
• Regulatory Hurdles: Indian regulators haven’t given the green light yet, and discussions about fees are ongoing.

What Needs to Change?

To get this system up and running, both countries need to find common ground. Here are some possible solutions:

1. Split the Costs: Banks and payment companies in both countries could share the fee, so it doesn’t burden merchants or travelers.
2. Follow India’s Lead: Nepal could adopt a zero-charge model like India’s, making QR payments free for everyone.
3. Raise Awareness: Many people still don’t know about the benefits of digital payments. Educating users and merchants could increase adoption.

A Real-Life Example

Let’s say Priya, a Nepali student in Delhi, wants to pay her tuition. Without QR payments, she has to:

1. Withdraw cash from an ATM.
2. Pay a significant amount in conversion fees (INR. 250 per transaction)
3. Carry the cash to her college.

With QR payments, Priya could scan a code and pay instantly from her Nepali bank account. No cash, no hassle.

What’s Next?

The big question is: When will Nepalis finally be able to use QR codes in India?

This isn’t just about a payment system—it’s about transforming the way Nepalis and Indians connect in an increasingly digital world. Cross-border QR payments could revolutionize how students, tourists, and businesses interact, making transactions smoother and more efficient. But for this to happen, policymakers and banks need to move beyond discussions and take decisive action.

Let’s hope that by 2025, we’ll look back at this moment as the turning point that paved the way for a seamless, borderless payment experience. The future is ready—are we?

So, what do you think? Should banks absorb the fees, or should merchants step up? Share your thoughts in the comments below!