Kathmandu, February 10

The country has to make electronic payment system robust for e-commerce to flourish.

A study carried out by the Ministry of Commerce (MoC) on the vision and roadmap for promoting e-commerce has identified electronic payment system as the major bottleneck for e-commerce. The cap in transaction amount put by Nepal Rastra Bank (NRB) on digital transactions and other regulations are not friendly for e-commerce, as per the study.

Stating that e-commerce could help a lot for development of micro, small and medium enterprises to sell their products and services globally, the study has recommended seeking modifications to the regulation, to allow micro-merchants to register with the MoC; or allow ward-level registrations to be accepted when opening a business bank account.

The study has underlined the need to work with the NRB to encourage the development of Payments Service Providers (PSPs) that would be able to accept international card payments. Such PSPs would provide payment services to the micro-merchants, with proceeds being deposited to their savings accounts.

The study has said that data protection and privacy; cyber security; the security of an e-commerce service; and consumer protection-related regulations should be issued to regulate and facilitate e-commerce entities. Buyers must be protected against the misrepresentation of goods for sale, and regulations protecting their rights when they are treated unfairly or when things go wrong must be enforced, as per the study.

Traders often highlight the hassles in exports compared to imports while utilising the e-commerce platform. “We can place orders through online trading platform through use of cards issued by Visa, MasterCard and Union Pay and some of our banks that are allowed to settle the e-commerce transaction,” as per traders. “However, as a majority of banks have yet to be connected with the international payment system, charges of clearing (of transactions) is quite high.”

Earlier, clearing of the payment used to be carried out from the international banks and charges of the international banks was high and the study of the MoC also recommends for the simplification in payment related issues that will boost the e-commerce relations with various countries.

E-commerce platform has no requirement of middlemen to purchase or sell goods. It can establish contacts directly between buyers and consumers. But, there are numerous hassles in receiving payment from the buyer because fund transfers from foreign countries are investigated as suspicious transaction in the country, as per traders.

One high-ranking official at the MoC said that the government has been putting its efforts to facilitate e-commerce as it has been emerging as an integral part of global trade. “E-commerce is important for a landlocked country like Nepal, where transportation cost is high,” the official said, adding, “Nepali exporters and importers can conduct trade at competitive rates through the use of online trading platforms and the MoC has been preparing a guideline to promote e-commerce.”

As per the official, the guideline will explain the role and responsibility of concerned agencies to promote e-commerce in the country and with other countries.