EDITORIAL: Digital payments

To prevent illicit activities, better regulation of digital payments is a must, but citizens’ privacy should be protected

Cashless society is something we keep hearing these days. The Information and Communication Technology (ICT) revolution has brought the world closer –  and hence the economies. Digital payment or digital transaction is the new revolution in the making. In today’s globalised and computerised context, Nepal cannot remain unaffected by the unprecedented developments that have been made in the ICT sector. We may be still a bit too far from creating a cashless society, but the country has made some progress when it comes to digital payment services. Digital payment is a system which effects transactions for one or multiple parties without the need for cash. Digital payments are being globally adopted now for the benefits they bring to the economies and the people. According to a World Bank report (2014), integrating digital payments into the economies of emerging and developing nations addresses crucial issues of broad economic growth and individual financial empowerment.

The government in its fiscal budget for 2018-19 has aimed to digitise government payments and revenue collection. It also aims to open bank accounts for every Nepali citizen within a year. Though it may look overambitious, the government move is praiseworthy for its openness to embrace new technology and innovations and integrate them into the economy. Digital payments can be greatly beneficial in this regard, as expanding digital payments can help ensure financial services to those adults who are excluded from the formal banking sector. It is, of course, the government which has to take the lead to drive the digital financial development ahead. Digital finance also ensures transparency in interactions, thereby reducing tax evasion and empowering government agencies to keep track of financial activities. It can also help reduce crimes in black markets. Digital payment services help reduce the cost of sending money both domestically and across borders and transfers are swift.

But with every innovation come unforeseen risks. Security is the foremost issue. System hacks and network failures cannot be ruled out. One of the major fallouts of digital payments could be the risk of frauds as well as money laundering through abuse of technology. Hence, while digital payment services should be encouraged for the broader benefits they bring, the better regulation is a must. Finance Minister Yubaraj Khatiwada while addressing the 21st plenary meeting of Asia/Pacific Group on Money Laundering in the Capital on Tuesday rightly pointed the need for better regulation of digital payments and mutual assistance between all jurisdictions to control the possible illicit practices. Security and reliability of financial transactions are vital to financial stability, and for this, there certainly has to be effective mechanisms to oversee the payment systems. In Nepal, digital payment technology is still in a nascent stage. As the services expand, more risks are likely to emerge. There is a need to identify and assess associated risks. The general public needs to be informed and educated about the benefits of digital payment services and the possibility of their misuse. An effective regulatory mechanism can prevent illicit activities, but in the meantime, the government must act carefully so as not to violate privacy in the name of strong regulation.

Stop child marriage

Early marriage is still rampant in rural areas, be it in the mountains, hills or in Tarai-Madhes. Government agencies and various social organisations have been campaigning against the age-old practice of child or early marriage for so many years. But such campaigns have hardly yielded any positive impact in society. This practice is quite common in poor families of all communities. According to District Community Hospital in Lamjung, 31 per cent women receiving parturition service in the last fiscal were below 20 years of age.

It means that girls were married off at an early age and started giving the first or the second child before they reach the marriageable age of 20 years as allowed by law. The community hospital revealed a shocking fact that a 14-year-old girl had also visited for parturition service. This is a serious health issue. Early marriage can have an adverse impact on woman’s health throughout her life. A girl also will be deprived of education, skills and job opportunity forever if she is married off within the teenage. This is a serious socio-economical and cultural issue all levels of governments must work in tandem to end such practice.