Nepal Digital Wallets Hit 28 Million Users in 2026

Nepal's digital payment story has moved well past the early-adopter phase. By mid-May 2026, the number of registered digital wallet users crossed 28.3 million — in a country of roughly 30 million people. That figure, drawn from Nepal Rastra Bank's current macroeconomic report for the first ten months of FY2025/26, puts wallet penetration at a level few predicted when eSewa launched its first QR codes in 2017.

The numbers behind the headline are equally striking. Wallets processed Rs 477.7 billion in transactions during those ten months. Monthly QR payment volumes reached 59.3 million by mid-May 2026, compared to under 200,000 per month in 2020. Total QR transactions across the ten-month period came to 454.5 million, with a combined value of Rs 12.43 trillion — a figure that exceeds Nepal's entire annual GDP by a significant margin, reflecting the high turnover of funds moving through these systems multiple times.

The Numbers: 28.3 Million Users, Rs 477.7 Billion in Transactions

NRB's ten-month data reveals a payment ecosystem that has grown faster than the banking sector's ability to deploy credit. Total deposits in the commercial banking system reached Rs 8.017 trillion against outstanding loans of Rs 5.915 trillion — a credit-to-deposit ratio of around 73 percent, leaving banks sitting on excess liquidity while wallet companies absorbed growing shares of consumer spending.

The QR payment surge is the clearest indicator of behavioral change. In 2020, most Nepali consumers paid in cash or through bank transfers. Today, scanning a QR code at a vegetable vendor in Asan or a petrol pump in Birgunj is ordinary. NRB data shows that the jump from under 200,000 monthly QR transactions in 2020 to 59.3 million in mid-May 2026 represents roughly a 300-fold increase in six years. Mobile broadband growth enabled much of this: 4G subscribers grew from 25.11 million in March 2025 to 26.58 million by March 2026, and total mobile broadband subscriptions stand at 27.5 million.

The average transaction size through QR payments works out to roughly Rs 27,355 — a number that suggests these are not just small daily purchases but include utility payments, rent transfers, and business-to-business settlements that have migrated away from cash and cheques.

The Khalti-IME Pay Merger: Nepal's Largest Wallet

The single biggest structural shift in the market came in July 2025, when Khalti and IME Pay merged to form Khalti by IME Limited. The merger created Nepal's largest digital wallet by registered user base, combining Khalti's strong urban youth presence with IME's extensive remittance and agent network across smaller towns and rural districts.

For context, IME Limited already operated one of Nepal's largest domestic remittance networks — a distribution reach that most pure-fintech companies cannot replicate. Bringing that network under the Khalti brand gave the merged entity an agent footprint that rivals, and in rural areas likely surpasses, eSewa's merchant network.

eSewa, operated by F1Soft International and backed by CG Group and Mega Bank, retains the widest merchant acceptance for online shopping, ticketing, and utility bill payment. Its integration depth with e-commerce platforms and established brand recognition remain structural advantages. The competitive picture now looks like a two-horse race: Khalti by IME Limited on user numbers and rural distribution, eSewa on merchant density and online commerce integration.

Smaller wallets — ConnectIPS (NRB-operated), Prabhu Pay, iPay, and others — continue to operate but have not demonstrated the scale to challenge either of the two leaders. The merger also signals what regulators and investors have long expected: consolidation was inevitable once the market matured past the growth phase.

NRB Regulatory Sandbox: Nepal's First Fintech Testing Framework

On 14 May 2026, Nepal Rastra Bank's Payment Systems Department brought the Regulatory Sandbox Guidelines into effect — Nepal's first formal framework for fintech experimentation under regulatory supervision. The guidelines allow banks, payment service providers, remittance companies, and registered fintech firms to test real products with real customers under a reduced-compliance regime for up to six months.

Eligible categories under the sandbox include application programming interfaces (APIs), mobile money services, retail payment innovations, digital KYC systems, digital lending, smart contracts, embedded finance products, regulatory technology (regtech), and cybersecurity tools. The framework is explicitly designed to lower the barrier for new entrants who cannot afford full compliance before proving market fit.

Several categories are excluded. Cryptocurrency, virtual assets, online betting and gaming platforms, and central bank digital currency (CBDC) pilots fall outside the sandbox scope — the last of these because CBDC is handled through a separate NRB division established specifically for that purpose.

The sandbox fills a gap that Nepal's fintech sector has complained about for years: NRB's existing licensing regime required companies to meet full operational standards before they could test whether a product would actually work in the Nepali market. Smaller fintech startups, and even mid-sized banks exploring new product lines, were effectively unable to innovate without absorbing the full compliance cost upfront.

CBDC and the NRB Act Amendment

Nepal Rastra Bank's Strategic Plan for FY2025/26 to FY2029/30 includes a target to pilot a central bank digital currency before the end of 2026. A dedicated CBDC Division has been established within the Payment Systems Department, tasked with technical design, stakeholder consultation, and — eventually — a controlled pilot with selected banks and merchants.

A proposed amendment to the Nepal Rastra Bank Act, currently under public consultation, would expand the legal definition of "financial institution" to include Payment System Operators (PSOs) and Payment Service Providers (PSPs) such as eSewa and Khalti. The change has generated debate among lawyers, tax officials, and the wallet companies themselves.

The core concern is regulatory and tax overlap. If PSOs and PSPs are reclassified as financial institutions, they become subject to NRB prudential regulations designed for banks — capital adequacy ratios, liquidity requirements, and audit standards that are significantly more demanding than current payment company rules. They would also face potential double taxation on financial transactions. Industry representatives, as reported by Kathmandu Post in March 2026, argue that applying bank-level regulation to payment companies would raise compliance costs and ultimately reduce competition.

NRB's position is that as wallet companies handle tens of billions of rupees in public funds, the consumer protection and systemic stability arguments for stronger oversight are valid. The bill has not been passed as of June 2026, but the debate over its shape will define how Nepal's payment industry is governed for the next decade.

What Drives Growth and What Limits It

Several forces are pushing wallet adoption upward. Banking sector surplus liquidity — Rs 8.017 trillion in deposits against Rs 5.915 trillion in loans — means banks have an incentive to push digital payment products to generate fee income even when lending demand is slow. NRB's policy repo rate stands at 4.25 percent, making the cost of money low enough that banks are actively competing for transaction volume rather than sitting on margin.

Remittance growth is a second driver. In the first ten months of FY2025/26, remittance inflows rose 41.2 percent year-on-year — a record pace driven partly by Malaysia reopening for Nepali workers and higher Gulf wages. A significant portion of incoming remittances now lands in mobile wallets rather than bank accounts, particularly in districts where bank branches are sparse. This pattern reinforces the wallet-first habit for recipients who then spend from their phones rather than withdrawing cash.

The 4G coverage expansion matters too. With 26.58 million 4G subscribers and 30.98 million total broadband subscriptions as of mid-May 2026, the infrastructure for mobile payments now reaches well beyond Kathmandu and the major cities. Merchants in district headquarters and even some rural market centres can accept QR payments reliably.

The limits, however, are real. NRB's own data shows that internet penetration — as distinct from broadband subscriptions — stands at around 56 percent of the population, or 16.6 million users, according to DataReportal's Digital 2026 Nepal report. The gap between broadband connections (30.98 million, which includes SIM-based data plans that may see light use) and active internet users (16.6 million) points to a connectivity divide that is not yet closed. Rural households, women in lower-income brackets, and the elderly remain underserved.

Merchant acceptance outside urban Nepal is also uneven. The QR payment ecosystem has grown faster in cities where merchants had smartphones early and customer demand was clear. In many hill and mountain district bazaars, the infrastructure exists in principle but usage remains low because both merchants and customers are still learning the system.

Nepal's digital payment sector has moved from experiment to mainstream infrastructure in under a decade. With 28.3 million users, Rs 12.43 trillion in annual QR transaction value, a new regulatory sandbox open for innovation, and a CBDC pilot on the horizon, the next phase will be defined less by user acquisition — that battle is largely won in urban Nepal — and more by depth of use, rural reach, and the regulatory choices NRB makes over the next eighteen months.