Sudeep Dhakal is the head of card and digital banking at Jyoti Bikash Bank Ltd. Republica caught up with Dhakal to talk about cashless economy and digital payments among other issues. Excerpts: 

What are some of the challenges in going for a cashless economy?
Nepal has a very high hard cash transaction in all B2C payments. Around 60% of the total population has a savings account in either A, B or C class banking and financial institutions licensed by NRB. Inclusion of the unbanked population is still a major challenge although NRB has directed to open branches at local units after the new federal setup. 

Lack of enough digital infrastructures is a major hurdle to make our economy cashless. Most of the digital infrastructures are concentrated in urban centers. Robust, safe, cost-friendly and widely penetrated internet connectivity must be available in urban and rural areas as well. Also, digital literacy about the methods, process and benefits is needed.

How is technology enabling a cashless economy? 
In recent years there has been a massive change in technology, and this has created new alternatives for people to interact with money. Services like ATM cards, QR payments, and online payments have allowed banks to reach customers easily and quickly. Technology-aided payment systems are expanding the society's access to a cashless economy. 

What are some of the positive and negative aspects of a cashless economy? 
Risk of money being stolen is rare. Money laundering, corruption are likely to decrease automatically as cashless transactions have a digital footprint. One can save time and money than that of a paper-based economy where storing, printing and mobilizing of paper money involves costs and time. 

Cashless economy also has downsides. Data breach, including stealing of personal information, is a major concern. Hackers may gain unauthorized access to bank accounts. 

The recent Foodmandu data breach can be taken as an example. Cashless economy is dependent on the service provided. Telecommunication providers, payment system operators, banks are components of a successful cashless transaction and disturbance in one of the components may crash the whole system. The unbanked and less literate population might face problems while working in a cashless system. 

How has cashless banking evolved over the years? 
Cashless banking includes small payments of recharge cards to huge business volume transactions. Cheque is the oldest method used for cashless payments. With the technology and deeper internet penetration, various payment methods are evolving in Nepal's economy. Mobile wallets like e-Sewa, khalti, IME Pay are more focused to consumer utility payments with small transaction volume. IPS and RTGS are online fund transfer methods. FonePay is focusing on the QR-based payment which has been a success in India and China. PoS and e-commerce transactions are being used for goods and service purchases in Nepal's urban areas as well. 

How about the digital payment methods? 
Various digital payment methods are being used in Nepal. Credit/Debit/Prepaid cards, mobile banking, internet banking, mobile wallets, PoS terminals, QR payments are the widely used digital payment methods. Moreover, different technology giants like Samsung, Google and Apple have launched their own payment platforms. Frictionless payments are emerging. It will come a time when you can pay for your lunch by just waving your hand.

 
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