Nepal | August 07, 2020

China’s mobile payment giants relent

WeChat Pay and Alipay keen to work legally in Nepal

Rupak D Sharma/Roshan S Nepal
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Kathmandu, May 23

Two Chinese mobile-payment giants, WeChat Pay and Alipay, which have been banned from offering digital payment services in Nepal, expressed interest to work in cooperation with authorities here to make sure transactions they facilitate do not violate Nepali laws, according to a senior Chinese embassy official.

The statement from the Chinese government comes three days after Nepal’s central bank banned the use of WeChat Pay and Alipay here, stating that the country was losing foreign income due to illegal use of those digital wallets by Chinese tourists.

“WeChat and Alipay so far haven’t started formal activities in Nepal because they haven’t received licence from the regulator,” Zhang Fan, economic and commercial counsellor at the Embassy of China in Kathmandu, told mediapersons today. But the two companies claimed that they fully respected laws and regulations of Nepal and would like to work in cooperation with regulators in Nepal to make sure their activities did not breach local laws and regulations.

WeChat Pay and Alipay are hugely popular mobile payment applications in China, which are also used in Nepal by Chinese tourists. But spending made by Chinese tourists through these digital wallets does not enter Nepal’s banking system because those mobile payment applications are not registered here. This has barred Nepal from logging spending made by Chinese tourists as foreign income. What’s more, Chinese nationals who operate hotels, restaurants, travel agencies and other businesses in Nepal encourage Chinese tourists to settle payments through these digital wallets, enabling them to repatriate earnings to their home country by circumventing Nepal’s tax network.

“These are new problems facing the country. And we are ready to deal with them. That’s why we have said the ban placed on use of WeChat Pay and Alipay will be removed as soon as Chinese payment giants register their firms here. If they cannot do so they can appoint representatives who can work on their behalf here,” central bank Spokesperson Laxmi Prapanna Niroula told THT, adding, “The bottom line is that spending made by Chinese tourists via digital wallets should be captured by the Nepali banking system.”

As of now, Himalayan Bank has shown interest to work with Alipay. “We have already signed an agreement with the Chinese firm,” Himalayan Bank CEO Ashoke SJB Rana said. The bank has since roped in Focusone Payment Solutions to build the network, according to Rana. “We are testing the system with five or six merchants,” Rana said. “We have also sought permission from the Foreign Exchange Management Department of the central bank to roll out the service.”

His statement comes a day after Alipay spokesperson told international media that “Alipay’s cross-border payment operations in Nepal are operating as normal,” giving the false impression that Alipay has already received permission from Nepal’s central bank to operate its service here.

“We have not yet given permission to Himalayan Bank to launch Alipay’s service in Nepal,” Niroula clarified.

THT also tried to get the views of WeChat Pay on this issue but the email went unanswered. A greater number of Chinese tourists use WeChat Pay in Nepal than Alipay, according to Thamel-based business operators.

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A version of this article appears in print on May 24, 2019 of The Himalayan Times.


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