KATHMANDU, Feb 16: In a groundbreaking development for Nepal's fintech sector, Khalti and IME Pay, two of the country's leading digital wallet companies, are merging in a first-ever digital wallet consolidation in Nepal with the signing of a Memorandum of Understanding (MoU) set to take place today.
Following an in-principle agreement, the new entity will be known as either ‘IME Khalti’ or ‘Khalti Pay,’ with discussions ongoing on the final name, according to sources. While the leadership team, including the Board of Directors (BOD) and Chief Executive Officer (CEO), has been finalized, the specifics of the financial structure and share ownership distribution are still under discussion.
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The merger comes at a time when the digital payments system of Nepal is evolving very rapidly. With market competition for digital wallets growing, with the market leader eSewa enjoying an 80 percent market share, the Khalti and IME Pay merger is considered a strategic move to further consolidate their market space.
Khalti, at 4 million subscribers, has been a prominent leader in the mobile payments industry, offering services such as recharges, bill payments, and e-commerce. In the meantime, IME Pay, a subsidiary of IME Group, is becoming increasingly popular through its focus on remittance and its expansion of digital wallet service offerings.
The long-planned merger will create a bigger player that will make ripples in the market and compete with market leader eSewa. Regulations of such mergers have already been laid down by Nepal Rastra Bank (NRB) with the first amendment to the Transaction and Settlement Bylaw, 2077, which facilitates digital wallet mergers under specified conditions. Khalti and IME Pay will be the first companies to take advantage of this regulatory change.
IME Pay, a service under the IME Group, has rapidly gained ground in the digital wallet space, especially for remittance services. Khalti, founded by Amit Agarwal, Dhruv Adhikari, Arvind Shah, and Manish Modi, has been a dominant player in mobile payments, with Worldlink acquiring a 40 percent stake in 2078 BS.
