The third edition of Money Expo for 2013 is being held in capital in the end of October. Aiming to promote investment opportunities and wealth protection strategies, this expo is the largest finance and investment show in Nepal. An interaction programme ‘Demystifying New Mode of Trade and Payments’ was conducted by New Business Age on September 19 as headway to the Expo. This interaction was dedicated to clear the existing technology that has been replaced by new technologies in the fields of trade and payments. Experts from banks and financial institutions presented their opinion on the current status of the financial sector. Excerpts:
Biswas Dhakal President, F1Soft International Ltd
• Our main objective is to facilitate customers with new and easy services. Other companies also carry similar objectives to make life easier for customers through digital transactions. Every transaction should be a digital transaction, be it large banking transactions or daily life transactions. We have initiated the online transaction service with this same purpose. This brings money to the banking sector and also increases investment. Remittance, which has covered large areas in the Nepali economy, is also brought to the country through online systems. The procedure of an online system is very easy and can be used by everyone. It can be done by simply sending an SMS and people are seen to be interested towards this service. But due to various reasons, the popularity of this system has not increased yet.
• The main problem of the digital system is a lack of its credibility among people. But the system is totally secured from our side. We have adopted international norms for security in the system. Our first priority is to provide secured transactions and we have not received any complaints regarding security and services from our customers.
• The main obstacle for digital transaction in reference to the worldwide global practice is digital illiteracy. Moreover, in an education deprived country like ours, the problem is huge. So it is impossible to achieve hundred per cent digital coverage in Nepal. However, our concept is to move from developed to less developed areas. For example, 50 per cent families of Kathmandu have their representatives abroad. A major responsibility for those abroad is to send money to their family. If we can convince the people in Kathmandu towards online transaction, they can opt for a digital medium as their mode of transaction. Moreover, the family in Kathmandu can also use an online medium to send money and other materials abroad. We can then enter rural areas as well. Using personal brand ambassadors rather than our individual effort for promotion would be more effective.
• There is a misconception that few government policies have created obstacles. However, if all processes are completed, it is not that difficult to work. Everyone involved in transaction has their own process. The Nepal Rastra Bank also has its own policy. The foreign exchange department also has its own policy. We cannot exist for long in this sector if we bypass their policies. According to the policy of the Nepal Rastra Bank, a private organization cannot hold funds of customers. So, we appointed banks for the payment and provided the custody of customers’ money to them. Similarly, foreign currencies are also handled by banks. So, there are no hurdles due to rules and regulations if they are handled properly.
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Samir Vajracharya Chief Technology Officer, Smart Choice Technology
• Smart Choice Technology (SCT) started in 2001 AD when there were hardly 4-5 ATMs and 10,000 cards. Currently, there are 15, 000 cards under the SCT network only and more than 18,000 people with access to cash. A total of 85 financial institutions are affiliated with SCT. We have focused on ATM transactions and Point of Sale (POS), mainly. There is a vast difference in the situation now and then. Our vision is to provide easy access to financial activities to the people and we have been successful in our mission to a large extent. This does not mean that this is the line of satisfaction as a large number of people hesitate to use ATMs still.
• The Nepali market is not ready for e-services, which has been the main hurdle for increment in the online market. We should be able to make people aware about the importance of online transactions so that their interest level towards this service increases.
• The government is not being able to lead this sector which is also seen as a major problem. The government should introduce some compulsory regulations regarding online services to increase people’s involvement in this sector. This is only due to the contribution and dedication of the private sector that online services have reached up to this level. But without support from the government, the online sector cannot sustain for long. The private sector is profit-oriented, but if the government sector takes charge then this sector can be service-oriented.
• Though the issue of security is big in this sector, SCT is very much concerned about the security issue and has worked on it. Our cards are based on pin codes which are the safest medium in this sector in comparison to a signature as it can be copied.
• Customers have to face problems because of problems in network but these problems are not solely from theSCT network. There are various service providers including telecom, banks and others involved with it. This is difficult to manage as network problems may arise anywhere anytime. People should be aware of this.
• Poorly developed infrastructures and a lack of skilled manpower are also major obstacles in the context of Nepal.
• We are also facing problems because of political instability and power cuts. The companies from foreign countries are interested to work with us which is a positive sign for us but these vital problems are blocking them to work with us.
• Similarly, there is a lack of government policy. The central bank should provide a benchmark to other banks for e-payment. It is difficult for the private sector to work without a benchmark. We are discussing with concerned authorities to solve these issues.
Rabin Kumar Shrestha Chief Technical Officer, PayBill
• We are making maximum efforts for improvement of the online sector but we are not getting results accordingly. There are various reasons for this. Firstly, people are not aware of this system. Most people still believe that the internet is only limited to the social media. They are not aware that various transactions can also be done through the internet. These people can be attracted to this sector if they are made aware.
• The issue of security is also a major concern but this system is very much secured. Customers should send two smses to transact from PEBIL. After the first sms, we send an alpha code to the customer and after that the customer must send both the alpha code and pin through sms. Only after this will they will be able to transact. So, this way our system is secured but people are still not convinced.
Subash Dhungana Executive, iPay
• iPay is an online payment system. We have been operating Muncha.com since 2002. Our services were limited to gift packages for long though we were not satisfied with the results. But some positive signs are emerging now based on which we are expanding our services. We have moved towards bringing remittance and media sites for downloading files along with online shopping. We have made agreements with seven banks for this purpose recently.
• The main reason behind the failure of e-commerce sites is the failure of payment to customers. For online payment, there are e-sewa, PayBill, SCT, credit card and our own production iPay which are associated with seven banks. But if the customer is asked to pay online, then s/he makes various excuses as they are not aware of these services. So cards of Nepali banks should get international validity for easy access to online payment. Around 20-25 people register in Muncha.com but at the end, they have problems with the payment system. Therefore, an easy way for payment should be initiated with support from the government or the central bank. Though these issues are discussed, we are lacking behind in implementation.
• We have not faced any problem regarding security, nor have we received any complaints. We are practicing international norms of security in our system. We can’t say that the online medium is hundred percent secured but problems have not occurred yet.
• Political instability is also main problem for this sector. The number of internet users has increased, but political stability is must for the sector’s rapid growth. Political stability brings employment, and it is when people are engaged and busy that they start engaging in online activities.
Bal K. Joshi President, MACHNET
• Nepal has immense potential for e-commerce. Though there is not much expansion in this sector, the condition has not worsened. There are a lot of websites conducting e-commerce and their businesses have increased through the medium. The expansion of the market for e-commerce depends upon target customers and identifying their needs.
• The main problem at present is not being able to invite international transactions to our country. PayPal is popular for this at national and international levels. But there are some procedural problems in the use of PayPal digital transaction in Nepal. The customers have to pay an extra fee to send the money. For example, if a person has to send 2000 dollars then s/he will have to pay around 2500 dollars. So, there is no prospect for using PayPal to expand the digital transaction market in Nepal. We are introducing a new platform related to money transfer for the first time in Nepal to make it easier for Nepali customers to transfer money from abroad.
