UPI in Nepal: Seamless Cross-Border Payments via Fonepay

In a major leap toward regional financial integration, UPI is now accepted in Nepal, allowing Indian citizens to make seamless QR-code-based transactions across various business establishments. This cross-border digital payment facility has been launched through a strategic partnership between NPCI International Payments Ltd. (NIPL) and Fonepay Payment Service Ltd., Nepal’s largest payment network.

What is UPI and Why Its Launch in Nepal is Important?

Unified Payments Interface (UPI) is India’s real-time mobile payment system that has revolutionized digital transactions. With its expansion to Nepal, Indian travelers can now make secure, instant UPI payments in Nepal, just like they would at home. This initiative simplifies currency exchange hassles and enhances ease of spending for tourists, business travelers, and pilgrims visiting Nepal.

This is the first time UPI has been enabled for person-to-merchant (P2M) QR-based transactions outside India in a full-scale commercial deployment. Indian users with UPI-enabled apps such as PhonePe, Google Pay, Paytm, and BHIM can now scan QR codes displayed by Fonepay-affiliated merchants across Nepal to complete payments instantly.

How UPI Works in Nepal?

• Indian citizens can pay Nepali merchants using QR codes displayed at the point of sale.
• Payments are processed in Indian Rupees (INR) and converted instantly into Nepalese Rupees (NPR) for the merchant.
• Supported through UPI-enabled mobile apps, this system uses the existing Fonepay network infrastructure in Nepal.

The facility is live across various sectors, including hospitality, retail, travel services, and restaurants. With this move, India becomes the first country to operationalize such a large-scale real-time cross-border payment system in Nepal.

NOTE: The use of UPI for transactions is only for MERCHANT QR provided by Fonepay in Nepal. It is not applicable for the personal bank QR of an individual, so Indians can use UPI only on transactions with merchants in Nepal.

Benefits of UPI for Cross-Border Transactions

Some of the major advantages of using UPI for transactions in Nepal and various other cross-border transactions are as follows: 

1. Seamless User Experience: People from India can now make payments in Nepal by using UPI just as they would in India, ensuring user convenience and familiarity. 
2. Cost-Effective: Using UPI for transactions in Nepal eliminates the forex exchange cost and also removes the hassle of carrying a lump sum. 
3. Instant Settlement: Quick transactions in real time improve merchant efficiency and customer satisfaction. 
4. Boost to Tourism and Trade: This move is expected to enhance economic ties between India and Nepal, driving growth in tourism, retail, and small businesses.

Statements from Key Stakeholders

Ritesh Shukla, CEO of NIPL, emphasized that this step reinforces India’s commitment to export its digital payment infrastructure and deepen economic and financial integration with neighboring countries. Diwas Kumar, CEO of Fonepay, stated that this integration is a major milestone in Nepal’s journey toward a digital economy and will have a long-term positive impact on regional trade and tourism.

What’s Next for UPI in Nepal?

Currently, only Indian users can pay Nepali merchants via UPI. However, plans are underway for the reciprocal feature—enabling Nepali citizens to make UPI-based payments in India. This feature could be rolled out in 2025, pending regulatory approvals from Nepal Rastra Bank and the Reserve Bank of India.

Terms and Conditions for Merchants

In addition to the services, there are specific terms and conditions that merchants must follow to utilize this service. Please refer to the terms and conditions for merchants on UPI service in Nepal by Fonepay. 

Conclusion

Accepting UPI in Nepal makes a groundbreaking step in South Asia’s financial integration. With this change, cross-border transactions have been simple and fostered economic cooperation and support a shared vision of a cashless digital future. Whether you’re a tourist visiting to delve into the nature of Nepal or a businessperson, paying with UPI in Nepal is now easier, faster, and more secure than ever with Fonepay.