Nepal | August 07, 2020

Use of Chinese digital wallets banned in Nepal


Rupak D Sharma
Share Now:
Nepal Rastra Bank

Nepal Rastra Bank. Photo: THT/ File

Kathmandu, May 20

Nepal Rastra Bank, the central bank, today placed a ban on the use of Chinese digital wallets WeChat Pay and Alipay, in Nepal, stating that the country was losing foreign income due to illegal use of those payment applications by Chinese tourists.

WeChat Pay and Alipay are hugely popular mobile payment applications in China.

Most Chinese tourists who visit Nepal carry these digital wallets. These payment applications are also used by Chinese nationals who operate hotels, restaurants and other businesses in Nepal. So, when Chinese tourists visit businesses operated by Chinese nationals in Nepal, bills are paid using the Chinese payment applications. This means payment for services acquired in Nepal are made in China because the Chinese digital wallets are not registered in Nepal.

This has barred authorities here from registering spending made by Chinese tourists as foreign income, as the money technically never enters Nepal’s banking channel. This has also enabled Chinese businesspersons to repatriate earnings without paying any taxes here because the domestic authority has no evidence to substantiate that those transactions have taken place in Nepal.

“These activities are illegal. That’s why we have banned the use of those applications in Nepal,” NRB Spokesperson Laxmi Prapanna Niroula told The Himalayan Times. “If people are found using Chinese payment applications, criminal investigation will be launched against them.”

The Himalayan Times first exposed this issue in its April 17 edition. After the story was published, the central bank had told THT it would look for ways to legalise the use of those digital wallets in Nepal as China happened to be the second largest source of foreign tourists for Nepal and those payment applications were widely used by the Chinese.

Nepal received 153,602 Chinese tourists in 2018, up 46.8 per cent compared to 2017. Nepal is planning to attract even more Chinese tourists in the Visit Nepal Year 2020, a government campaign that aims to attract two million foreign tourists.

Tourist spending is the third largest source of foreign income for Nepal after worker remittance and merchandise exports.

“We know most of the Chinese use WeChat Pay and Alipay. But foreign companies that provide payment related services in Nepal must register their businesses here. If not, services of those Chinese companies should be provided by firms registered in Nepal,” said Niroula.

At least two Nepali companies have expressed interest to work as intermediaries for those Chinese mobile payment giants in Nepal, according to a senior NRB official who did not want to be named. “But we have not granted them permission yet as they have not fulfilled all the requirements,” the official said.

Once these intermediaries come into operation, they will route payments made using WeChat Pay and Alipay through Nepali banks, helping Nepal register those spending as foreign income.

But even if these intermediaries start settling payments, illegal use of Chinese digital wallets cannot be ruled out because those applications allow peer-to-peer transactions. This means Chinese tourists visiting Nepal and Chinese nationals operating businesses in Nepal can always send money to each other bypassing the intermediary.

This can only be prevented if the Chinese payment companies deploy technology called geofencing to track whether Chinese nationals are making payments using the formal channel, according to experts in the field of digital payment. This way, payments made by Chinese citizens, who have bypassed the formal channel, can be blocked.

THT had emailed the Chinese app companies on April 26 to get clarity on these issues, but they went unanswered.




A version of this article appears in print on May 21, 2019 of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Banke district

Seven govt offices in Banke district sealed

NEPALGUNJ, AUGUST 5 COVID-19 was detected in a government employee for the first time in Nepalgunj on July 27. A female staff working at the Banke Transport Management Office tested positive for the virus. Since then, employees in seven government offices have contracted the deadly virus in th Read More...


Encroachment blamed for inundation

CHITWAN, AUGUST 5 Encroachment of the main city area of Bharatpur Metropolitan City and the canal of Narayani lift irrigation project has caused inundation of the city area. Construction of road in the area and building of structures by burying the canal has led to inundation in the city, said Read More...


Body left to rot in hope of resurrection

TIKAPUR, AUGUST 5 “Religious belief of bringing the dead back to life” has allowed a dead body to rot. The mortal remains of a man of Tikapur-1 of Kailali district started stinking after a pastor in the locality assured the family of the deceased that the deceased would resurrect with his pra Read More...

30 rape cases in 4 years in Darchula

DARCHULA, AUGUST 5 Darchula, the district in Sudurpaschim state, reported 30 cases of rape and attempted rape against women and girls in the past four years. According to Darchula District Police Office, most perpetrators are from within the circles of families, relatives and are known to the Read More...

US steps up campaign to purge 'untrusted' Chinese apps

WASHINGTON: The Trump administration said on Wednesday it was stepping up efforts to purge "untrusted" Chinese apps from US digital networks and called the Chinese-owned short-video app TikTok and messenger app WeChat "significant threats." US Secretary of State Mike Pompeo said expanded US efforts Read More...

Aviation ministry preparing protocols to resume international flights

KATHMANDU, AUGUST 5 As the government has announced all domestic and international flights will be resumed from August 17, all the concerned authorities are busy preparing protocols on how to manage the flights and passengers during this pandemic. Spokesperson for Ministry of Culture, Tourism Read More...

1,313 Nepalis repatriated

KATHMANDU, AUGUST 5 More than 1,000 Nepalis were repatriated today via eight flights. According to Tribhuvan International Airport (TIA), a total of 1,313 Nepalis were repatriated today. Nepal Airlines Corporation evacuated 151 and 265 passengers from Doha in Qatar and Dubai in the United Arab Read More...

Ncell transforms into a public company

KATHMANDU, AUGUST 5 The country’s largest private telecom company Ncell has been transformed into a public company. Publishing a notice today, Ncell informed its transformation to a public company. With this transformation, Ncell will now be recognised as Ncell Axiata Ltd and all its oper Read More...