A CASE STUDY

ON
DIGITAL WALLET AND IT’S EMERGENCE IN NEPAL
(With reference to Esewa and Khalti)

A Project Work Report

Submitted By:

SAFAL KHATIWADA
T.U. Reg. No.:7-2-920-241-2018
4th Year Symbol No.:709200234
Group: Finance
Danfe College
Putalisadak, Kathmandu

Submitted To:

Office of Controller of Examination

Faculty of Management
Tribhuvan University

In Partial Fulfillment of the Requirement for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Kathmandu, Nepal
April, 2023
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DECLARATION

I hereby declare that the project work entitled “DIGITAL WALLET AND IT’S
EMERGENCE IN NEPAL” submitted to the Faculty of Management, Tribhuvan
University, Kathmandu is an original piece of work under the supervision of Mr.
Ganesh Khadka, faculty member of Danfe College, Putalisadak, Kathmandu and is
submitted in partial fulfillment of the requirements for the degree of Bachelor of
Business Studies (BBS). This project work report has not been submitted to any other
university or institution for the award of any degree or diploma.

Signature:
Safal Khatiwada
Date:
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SUPERVISOR’S RECOMMENDATION

The project work report entitled “DIGITAL WALLET AND IT’S EMERGENCE IN
NEPAL.” submitted by Safal Khatiwada of Danfe College, Putalisadak, Kathmandu is
prepared under my supervision as per the procedure and format requirements laid by the
Faculty of Management, Tribhuvan University, as partial fulfillment of the requirements
for the degree of Bachelor of Business Studies (BBS). I, therefore, recommend the
project work report for evaluation.

Signature:

Name of Supervisor: Ganesh Khadka

Name of Campus: Danfe College

Date:
 iv

ENDORSEMENT

We hereby endorse the project work report entitled “DIGITAL WALLET AND IT’S
EMERGENCE IN NEPAL.” submitted by Safal Khatiwada of Danfe College,
Putalisadak, Kathmandu, in partial fulfillment of the requirements for the degree of the
Bachelor of Business Studies (BBS) for external evaluation.

Signature: Signature:

Name Of Chair: Mr. Krishna Poudel Name of Principal: Mr. Shishir Sharma
Neupane

Chairperson, Research Committee Name of Campus: Danfe College

Date: Date:
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ACKNOWLEDGEMENT

The research report entitled “Digital Wallet and It’s Emergence in Nepal” has been
prepared in partial fulfillment for the degree of Bachelor of Business Studies (BBS) 4 th
year under the supervision of respected teachers Mr. Ganesh Khadka and College Chief,
Mr. Shishir Sharma Neupane of Danfe College. I would like to thank them for providing
me constant support throughout the duration of the project. I really appreciate their
efforts, necessary guidelines and constant feedback in order to complete this academic
task in a proper way.
Furthermore, I would like to thank Tribhuvan University for including the research
project in partial fulfillment of the requirement for degree of Bachelor of Business
Studies (BBS) 4th year. This project has certainly helped me increase my subject matter
knowledge and enhance my research conducting skill which I believe will be a great
advantage in the future.
Last but not the least; I would like to extend my special thanks to my friends and family
who directly or indirectly provided me with advice and support to accomplish my project
in efficient and better way.

Regards
Safal Khatiwada.
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Table of Contents

Title Page
…………………………………………………………………………………………….i
Declaration………………………………………………………………………..........................ii
Supervisor’s Recommendation………………………………………………........................…
iii
Endorsement……………………………………………………………………….......................iv
Acknowledgement…………………………………………………………………………………..v
Table of contents……………………………………………………………………………………
vi
List of Tables……………………………………………………………….………………………
vii
List of Figures…………………………………………………………….…………………….…
viii
Abbreviation……………………………………………………………….……………….………ix

CHAPTER I: INTRODUCTION………………………….................................................1

1.1 Background of the study…………………………………………...

………………….1
1.2 Profile of Digital Wallet……………………………………………..………………..2
1.3 Statement of Problem…………………………………………………………………3
1.4 Objectives of the
Study………………………………………………………………..4
1.5 Rationale of the Study………………………………………………...………………4
1.6 Literature Review…………………………………………………….……………….5
1.7 Resarch Methods……………………………………………………………………...7
1.8 Organization of the
Study……………………………………………..........................9
1.9 Limitaions of the Study…………………………………………………………….....9

CHAPTER II: RESULTS AND

ANALYSIS………………………………………….11

2.1 Data Presentation……………………………………………………...

……………...11
2.2 Data analysis…………………………………………………………………………14
2.3 Findings…………………………………………………………………....................18
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CHAPTER III: SUMMARY AND CONCLUSION…………………....

……………..19

3.1 Summary…………………………………………………………………..................19
3.2
Conclusion……………………………………………………………........................20

BIBLIOGRAPHY………………………………………………………………………....

APPENDICES……………………………………………………………………………..
LIST OF TABLES

Table 2.1.: Presentation of Responses………………………………………………...…12

Table 2.2.: Cronbach’s Alpha Test………………………………………………...….…15
Table 2.3.: Usage of Payment Systems ………………………………………….............16
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LIST OF FIGURES

Fig 2.1.: Framework for adoption of digital wallet in Nepal………………………….....18

 ix

ABBREVIATIONS

A : Agree
DA : Disagree
ECC : Electronic Cheque Clearing
N : Neutral
NRB : Nepal Rastra Bank
PSO : Payment Service Operator
PSPs : Payment Service Providers
RTGS : Real Time Gross Settlement
SA : Strongly Agree
SDA : Strongly Disagree
SPSS : Statistical Package for the Social Sciences
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CHAPTER-I
INTRODUCTION

1.1 Background of the Study

1.1.1. Meaning of Digital Wallet
Digital wallets are financial applications that allow you to store funds, make
transactions, and track payment histories on devices like phones and tablets. A software,
electronic device, or online service that enables individuals or businesses to make
transactions electronically. A digital wallet is also known as an e-wallet. A digital wallet
is an online payment tool or software application that serves as an electronic version of a
physical wallet. Also known as an electronic wallet, e-wallet or mobile wallet, it enables
users to securely store digital versions of payment methods -- credit and debit cards, gift
cards, cryptocurrency, boarding passes, event tickets, passwords and coupons -- to use on
the go with their smartphones or smartwatches. There are several digital wallets
available. Here are some of the most well-known. Traditionally carried in the form of a
smartphone app, a digital wallet can also exist in other forms, such as a desktop.
However, the mobile app is the most popular version of the digital wallet, owing to its
mobility and flexibility. Some of the major wallets available in Nepal are eSewa, Khalti,
Imepay, Cellpay, Moru etc.

1.1.2. Development of Digital Wallet in Nepal

The term digital wallet in itself says about the digital payment system on which it is
based for the systematic and proper functioning. Digital payment is the transfer of value
from one payment account to another using digital devices such as a mobile phone, POS,
a computer or a digital channel. Digital payment in Nepal does not have a long history. It
dates back to the early 1990’s when Nabil bank introduced credit cards. Few other banks
like Himalayan Bank, Kumari Bank and Laxmi bank gave the phenomena a push by
adding services related to it.
Later on with the increasing accessibility of the internet in Nepal, people are starting to
use more digital payments. It is not surprising that Nepal has been adopting the
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technologies, being an open economy. Today all digital wallets like Khalti, IME Pay,
eSewa and others have become trendier. People have become more familiar with digital
payments after Covid-19 as the rules for social distancing have been implemented. Due to
the fear of infection people avoided staying in queue to pay the bills and shop physically.
eSewa, Nepal’s first digital wallet is 13 years old now. The application that was released
in beta version in 2009 launched its full-fledged service after a while on January 25,
2010. Since then, it has made significant contributions to building a cashless economy
during this period.
The concept of digital/mobile wallets started in 2009 after the launch of eSewa by F1
Soft International. The introduction of eSewa revolutionized the concept of digital
payment in Nepal. Since then Nepal has seen different digital payment service providers.
Since eSewa, other payment systems like Khalti, IME Pay, QPay, iPay, etc. have
launched their services.
Khalti Digital Wallet and Payment Gateway has been a part of this revolution. Starting its
journey from 2017 with a small investment to growing as a big corporate house in 2021,
within a few years it has contributed a lot for the digital payment industry in Nepal with a
user base of more than 2 Million.

1.2. Profile of Digital Wallet

1.2.1. Profile of Esewa
Established in 2009, eSewa is a household name today. eSewa is Nepal’s pioneer digital
payment service provider, licensed by Nepal Rastra Bank (Central Bank of Nepal), and
an ISO 27001:2013 certified company. eSewa is a subsidiary company of F1 Soft
International, a leading FinTech company of Nepal. Team eSewa has been working
tirelessly to achieve its vision to create a cashless economy. For this, the company has
onboarded more than 400k+ merchants, 120k+ agents, 51+ Banks and Financial
Institutions (BFIs) and established a wider network of agents nationwide.Customers of
eSewa can make various bill payments easily from eSewa’s mobile app or website. Now,
recharging mobile, paying utility bills (NEA, Khanepani, Landline, etc.), internet bills,
TV bills, school fees, and many more are all on your fingertip. Being able to make the
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payment to government offices such as Inland Revenue Department, Traffic Fine

Payment, payment to Department of Foreign Employment, and more act as a cherry on
top for the customers.

1.2.2. Profile of Khalti

Khalti is a mobile wallet, payment gateway & service provider in Nepal. Launched in
January 2017, Khalti is an emerging online payment solution in Nepal. It allows users to
pay for a range of services like basic utility payments, hotel bookings, movie and
domestic flight tickets, events and many more. Khalti offer payment solution to over
hundreds of merchants across Nepal and provide seamless payments using ebanking,
smart banking, cards, and wallet. Being not just limited to mobile app users, Khalti has
more than 8000 POS and Agent Network providing Khalti services to end users. Khalti is
home to some of the brightest minds in the country, which includes a team of highly
skilled developers and interactive marketers. Their solution-oriented approach makes
them reliable for any and all kind of service you might require from Khalti with the best
user experience possible.The wallet’s goal is to simplify lives of people by bringing
financial inclusivity to every individual in Nepal and take the payment industry from
offline to online through best practices.

1.2. Statement of the Problem

Digital wallets allow businesses and consumers worldwide to accept payments, receive
funds, or send and receive remittances from friends and family in other nations. Digital
wallets do not require a bank account at a bank with a physical branch.The era of digital
wallet started around 2009 in Nepal since then there has been significant spike in the
digital sector of the country. The Covid-19 pandemic and nationwide lockdown
catapulted the trend forcing users to adopt digital mode of receiving and making
payments. Digital Wallet has helped to make a revolution in Nepalese Economy.
In Nepal NRB has been tasked with the responsibility of issuance, revoke or refusal of
license to an entity to work as a payment service provider or payment systems operator as
per ‘Payment And Settlement Act 2019.’ Also NRB is empowered to supervise and
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inspect the licensed institutions on a regular basis. As the digital wallet are also payment
service providers (PSP’s), they are governed by the central bank of Nepal, Nepal Rastra
Bank (NRB).
Following are the areas covered in this report.
 How Digital Wallets have been significant in the Nepalese Economy?
 What is the impact of Digital wallets in financial sector of the country?
 What are the supporting factors for development of digital wallet in Nepal?
 How Covid-19 acts as catalyst for rise of Fintech companies?

1.4. Objectives of the Study

The objectives of this study are as follow:

 To find the general perception of the public about Cash Payments.
 To explore the reason for shifting from offline Cash payments to digital
payments.
 To determine the future prospects of digital payment in day-to-day transactions in
Nepal.

1.5. Rationale of the Study
Here is the justification for undertaking a given study
 This study will provide insight into the current state of digital wallets in Nepal
and its emergence in the financial sector.
 The study will also identify the advantages and disadvantages of using digital
wallets in Nepal and the impact they have on the economy.
 The findings of this study will be useful for policymakers and stakeholders in the
financial sector in Nepal to better understand the potential of digital wallets in the
country.
 This study will help financial service providers to design better digital wallet
solutions that cater to the needs of Nepalese consumers.
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1.6. Literature Review

A literature review creates a "landscape" for the reader, giving her or him a full
understanding of the developments in the field. This landscape informs the reader that
the author has indeed assimilated all (or the vast majority of) previous, significant works
in the field into her or his research. Researcher used to do literature review to understand
research problem better and know the methodology that is to be used in research.
Researcher also try to find out knowledge, gap, problems of the past research and current
status of the topic.

1.6.1. Review of Previous Research Work

1.6.1.1. Review of Previous Study in Nepal

Tamang (2021), in his research, tries to summarize the Acceleration of Digital Payment
Adoption during COVID-19 Pandemic.
Major objectives of the study are as follows:
 To find the general perception of the public about Cash Payments during COVID-
19 Pandemic.
 To explore the reason for shifting from offline Cash payments to digital payments
during the CoVid-19 pandemic.
 To determine the future prospects of digital payment in day-to-day transactions
post Covid19 in Nepal.
Major findings:
 People preferred digital payment compared to cash, and most of them use digital
payments for daily retail shopping.
 The fear of coronavirus and government initiatives motivated people to use
ewallets during the pandemic.
 Not providing services and supports to businesses and users in the rural area and
keeping the existing users after the pandemic ends are challenging factors
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impacting the future prospect of digital payments in Nepal. Educating users about
the benefits of digital payments and providing information about government fees
and tax payments via digital payment could attract a new segment of the
population that has not used digital payment even during this pandemic.

1.6.1.2. Review of Previous Study in Foreign Countries

Hendy Mustiko Aji (2020), in his research on COVID-19 and e-wallet usage intention: A
multi group analysis between Indonesia and Malaysia.
Main Objectives:
 To contributes to the literature by examining the effect of perceived risk,
government support, and perceived usefulness on customers’ intention to use e-
wallet during COVID-19 outbreak.
 To give more fruitful insight and
 To investigate the group difference between Indonesia and Malaysia in the
overall model.
Major Findings:
 Statistical tests show that the intention to use e-wallets is directly determined by
perceived risks and perceived usefulness.
 The results show that COVID-19 outbreak has made customers in both countries
worried about getting infected by SARS-Cov2 that can be possibly transmitted
through physical money.
Mukund Jakhiya (2013), has carried out a research work on the topic ‘A Study on the
Effect of Mobile Money in Modern India.’
Main Objectives:
 Understand the emergence of Mobile Money in India;

 Understand the growth of Mobile Money in India; and

 Access the effect of Mobile Money in India.

Major Findings:
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 Mobile money that will make shopping a more comfortable experience is set to
transform the Indian retail business.
 Payment services use fraud detection systems equipped with machine learning to
secure the payment process.
 Retailers are developing utility consciousness of mobile payment options such as
P2P, C2B and B2B, Mobile Microfinance Loans, and the two aspects of Mobile
Banking, i.e., Transactional and Informational banking.

1.6.2. Research Gap

The purpose or goal to find, examine and analyze this research article is to find a gap for
contributing new research.

 The emergence of digital wallets has not been discussed or necessarily clarified in
any previous reports.
 Some gaps such as taking small group of people of a certain area as a sample are
still existing in the research.
 Data Collection method is based on the data generated from questionnaires
provided to sample group of people which only includes small part of primary
data collection method.

1.7. Research Methods

As digital wallets are a comparatively new research area with little previous empirical
work available on the subject, a qualitative approach was chosen to explore the study on
the growth and effect of mobile money or digital wallet in Nepal.

1.7.1. Resarch Design

Resarch design means an overall framework for the activities to be taken during the
course of the study. It tells us about what observations to make, how to make them and
how to analyze the quantitative representations of the observation.
For the study analytical and descriptive research design will be used to investigate the
research objectives. While preparing the report many questionnaires will be used and the
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findings and the conclusion will be based upon the answers given by the respective
individuals.

1.7.2. Population and Sample

There are 27 Payment Service Providers (PSPs) in Nepal as per recent Payment-
Oversight-Report-2021-22 issued by NRB. For the purpose of the study, it would not be
possible to collect information and data from all PSPs during the short period. Therefore
the researcher has entitled only two of them as Esewa and Khalti.

1.7.3. Types of Data

There are two types of data such as primary data and secondary data. In this research, the
researcher will have used primary data. In this research the researcher will have used
qualitative data (data included as content, narration and thematic analysis).
 Primary Data
Primary Data is the process of gathering data directly from a first-hand source. In
other words, it’s data that’s collected by the organization that expects to use it.
Methods include surveys, interviews, observation, and focus groups. For eg, The
World Bank tracked the impact of COVID-19 in Afghanistan through 14,000
phone surveys. The data collected through these surveys is primary data.
 Secondary Data
Secondary data, on the other hand, is data collected by someone other than the
primary user and made available for other researchers to use. You can also think
about secondary data as another organization’s primary data – when a different
entity or group uses it, it becomes secondary data. Using the example above, if a
government organization accesses the World Bank’s survey data about poverty,
then it becomes secondary data for this government organization.

1.7.4. Data Collection Method

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In this report data are collected from primary sources. There are generally three major
types of data collection method as interview method, questionnaire method and
observation method. Out of these questionnaire method is used in this report.
In this method a questionnaire (a list of questions related to the investigation of an
inquiry) is prepared and is given to the respondents that are expected to read band
understand the questions and write down reply in the questionnaire itself.\

1.7.5. Techniques of Analysis

Data collected from various sources and methods will not be meaningful without its
appropriate presentation and analysis. The study will use one of the following methods
to analyze the data.
 Reliability Test Analysis
 Measures of Central Tendency such as Mean
Here the researcher uses these methods and analyses by listening to stories of research
subjects, attempting to understand the relationship between the experience of the
individuals and their social framework.

1.8. Organization of the Study:

The study on the respective topic ‘Digital Wallet and It’s Emergence in Nepal’ is divided
into three chapters viz. Introduction, Results and analysis and Summary, conclusions and
recommendations.
Introduction includes, Background of the study; Profile of the organization; Objective of
the study; Rational of study; Statement of Problem; Review of literature; Organization of
study and Limitation of study.
Results and Analysis includes data presentation, data analysis and findings. Summary and
Conclusions are thereafter. Finally, bibliography and appendix are represented at the end
of the study.

1.9. Limitation of the Study

Various factors such as time constraints, financial problem, lack of research experience
and lack of either comprehensive or extensive one for the completion of this study the
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following facts are the basic limitation of the study in spite of hard efforts put by the
researcher.
Also the study is done for the partial fulfillment of academic degree (Bachelor in
Business Studies) as assigned by the Tribhuvan University (T.U)
 This study is mainly based on primary data.
 This study only covers Nepal in terms of geography..
 The study only covers digital wallet and not the whole digital payment system.
 It lacks the analysis of PSO, commercial banks, development banks and finance
companies working as PSP for a correct overview of Nepalese financial and
economic market.
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CHAPTER III:
RESULTS AND ANALYSIS

2.1. Data Presentation

The study aims to explain emergence of Digital mobile wallets in Nepal. The following
subtopic contains the presentation and analysis of collected data for the study. It intends
to analyze the data collected from the questionnaire and present the finding of the
analysis. Primary data was collected and analyzed in a systematic way to derive the
findings. The investigation was conducted in form of the survey through a structured
questionnaire distributed to the sample selected. The Questionnaire was distributed to
sample respondents and the questionnaire types included in the survey was multiple
choice and Likert scale.
5 points Likert scales have been used to collect the perceived importance of determinants.
In the Likert scale used 5 is considered strongly agree and 1 is considered strongly
disagree to the statement. The response received from the respondents has been arranged,
tabulated, analyzed and presented in bar diagram and pie chart to facilitate the descriptive
analysis of the study. The respondent profile is extracted from those who participated in
the survey on strata of gender, education level & age group.

2.1.1. Presentation of Data generated from Questionnaire

The list of following questions related to the investigation of the inquiry is prepared and
given to various types of people and they are expected to read and understand the
questions and write down the reply in the questionnaire itself as presented in the Annex 1.
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Table: 2.1.
Presentation of Responses
Statements Ratings (%) Mean
SDA DA N A SA (%)
1. I would find Digital mobile 6.7 9.9 33 33 17.21 19.96
wallet useful in my
payments & transactions.

2. Using Digital mobile wallet 13.24 16.55 3.31 33 33 19.82

enables me to accomplish
tasks of payment &
transactions more quickly.

3. Using Digital mobile wallet .66 26.49 6.62 16.55 49.67 19.998
increases my productivity.

4. If I use Digital mobile 3.31 6.62 3.31 66.22 23.84 20.66

wallet, I will increase my
ability to perform timely
transactions.
5. My interaction with Digital 33.1 16.55 16.55 33.1 .66 19.992
mobile wallet would be
clear and understandable
6. It would be easy for me to 18.21 24.83 6.62 33.1 17.22 19.996
become skillful at using
Digital mobile wallet.
7. I would find Digital mobile 3.31 16.55 19.86 33.77 26.49 16.396
wallet easy to use.
8. Learning to operate Digital 33.77 26.49 6.62 16.55 17.21 20.128
mobile wallet is easy for
me.
9. In general, my organization 3.31 6.62 9.93 33.77 47.02 20.13
has supported the use of
Digital mobile wallet.
10. I have the resources 1.66 8.28 23.12 33.11 33.77 19.988
necessary to use Digital
 13

mobile wallet.
11. I have the knowledge 8.28 3.97 3.97 52.98 33.77 20.594
necessary to use Digital
mobile wallet
12. Digital mobile wallet are 3.31 .66 .99 28.14 66.89 19.998
compatible with other
systems I use
From Annex 1
Out of 302 responses,
 33% of the responses are in favor of agree and 17.21% are in favor of strongly
agree in the first statement as shown above.
 Similarly, 33% of responses are in favor of SA and A in the second statement
which shows the significance of digital wallets in day to day operation.
 49.67% of responses are in favor of SA in the third statement which shows the
significance of digital wallets in day to day operation.
 66.22% of responses are in favor of A in the fourth statement.
 33.1% of responses are in favor of A and SDA in the fifth statement which shows
the potential of digital wallets.
 33.1% of responses are in favor of A in the sixth statement.
 33.77% of responses are in favor of A in the seventh statement.
 33.77% of responses are in favor of SDA in the eighth statement which shows lack
of awareness among general people about digital wallet systems.
 33.77% and 47.02% of responses are in favor of A and SA in the ninth statement.
 33.11% and 33.77% of responses are in favor of A and SDA in the tenth statement
which shows the available resources to use the digital wallet as well.
 52.98% of responses are in favor of A in the eleventh statement and
 Finally, 66.89% of responses are in favor of SA in the twelfth statement.
These responses shows that people in general have knowledge, available resources and
are benefited by digital payment systems. So development of digital wallet is topic of
emergence in scenario of Nepal.
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2.2. Data Analysis

2.2.1. Reliability test analysis (Cronbach’s Alpha Reliability Test)
A reliability test is a necessary step while validating the data collected from the survey.
Testing helps to assess the consistency of the responses mostly collected in the form of
Likert questions (Elsayed, 2012). For this research, various variables were processed in
IBM SPSS for reliability test. The Cronbach’s Alpha value was 0.822, which is higher
than 0.7, the minimum acceptable requirement. So, the items taken into consideration for
this research are reliable and will be taken to find the results.

Table 2.2: Cronbach’s Alpha Test

Cronbach’s alpha Cronbach’s alpha based on Number of items
standardized items
.811 .822 14

COVID-19 is a very new virus, resulting in a pandemic within a few months of starting.
The impact of the pandemic has mostly on the health and economy of the entire people of
the world. As the world lost trillions of dollars as the economy was shut down, the silver
lining effect of this pandemic was seen on the digital economy and information
technology. The primary focus of this research was to find the emergence of digital
wallets in Nepal which is linked with the time period during the COVID-19 pandemic.
During COVID-19 we found that the risk of transmission of coronavirus by cash has
exponentially raised the digital payment users after the pandemic was declared by WHO.
The sample size for the survey was 302 people, and we validated the results by applying
various statistical tools like IBM SPSS and Microsoft Excel. Among the most important
findings of this research, the shift from cash to digital payment within a short period of
time is recorded. The number of people preferring cash payment was 177, which declined
during the pandemic dragging it to just 86 people. The number of digital payment users
 15

also seemed hiked during the pandemic in Nepal. From 125 people using digital payment,
216 people started using digital payment since the start of COVID-19 in Nepal among the
302 respondents.
2.2.2. Analysis of other data
Table: 2.3. Usage of Payment Systems

Source: Nepal Rastra Bank Oversight Report FY 2020/21

As access on the payment system is increasing, the use of different payment instruments
has also increased in Nepal. After the Covid-19 pandemic, instruments like connectIPS,
e-Wallets, Mobile Banking, Internet Banking, QR code, and Cards have widely been used
as customers can use these instruments in self-service mode. Further, e-commerce and
POS transactions have also increased after the pandemic. The usage of different payment
system instruments is presented in Annex 1. Post the Coivd 19 pandemic, the use of
faster payment systems like connectIPS, QR, e-Wallets, Mobile Banking, and Internet
Banking has sky-rocketed. The number and value of connectIPS transactions have grown
by 109.3 percent and 127.1 percent respectively from 2020/21 to 2021/22. Similarly, QR
code-based payment is the most widely used digital payment instrument in the country.
The number and value of QR-based payments have surged by 382.8 percent and 366
percent respectively from 2020/21 to 2021/22. The use of mobile banking, internet
banking, and wallets are all on the rise in recent years. While card-based payments (debit
and credit cards) are increasing at a decreasing rate, the use of prepaid cards has plunged,
especially after the Covid-19 pandemic. The number and value of transactions through
 16

prepaid cards increased by 274 percent and 263.3 percent respectively from 2020/21 to
2021/22. The primary reason for the rapid growth in volume and value of prepaid card
transactions, which had dropped during the Covid-19 pandemic, could be the removal of
travel restrictions by different countries. While the usage of POS is increasing, a decline
in e-commerce or online payments using cards has been observed. The number and value
of online payments using cards have reduced by 39.1 percent and 46.8 percent in 2021/22
as compared with 2020/21. Many customers opt for cash-on-delivery options for e-
commerce shopping. As a result, there may have been a decline in e-commerce
transactions through cards. Further, online sites have integrated wallets and instant
payment systems for online payment, providing cardless digital payment options to
customers. Thus, a detailed study is required to identify the reason behind the decline in
e-commerce transactions through cards. The RTGS system has processed large value
payments with 40.6 percent and 105 percent growth in the number and value of
transactions respectively in 2021/22 as compared with 2020/21. As digital financial
services are proliferating, the use of cheques and the ECC system is slowly decreasing.
Nevertheless, cheque is still one of the most favorable mediums of fund transfer and
payments in Nepal. The number and value of ECC transactions have grown by 13.2
percent and 8.9 percent respectively in 2021/22 as compared with 2020/21.
 17

Fig 2.1: Framework for adoption of digital wallet in Nepal

Area of living

Age IT Skills

COVID Risk
Gender (Perceived Risk) Education

Fast and Easy

Safety accepted everywhere
(Perceived (Perceived ease of
Usefulness) use)

Intention to use
digital payment
(Intention to
use)

Adoption of Digital Wallet

(Actual system use)
 18

The above figure shows how the COVID-19 impacts in growth of digital wallets in Nepal
due to safety factor and other factors as intention to use and it’s adoption.

2.3. Findings
By conducting the research we find that the majority of the responses received suggest
for adoption of digital wallet and use of digital mobile wallet more and more.
The below table shows the various responses on the questions of the questionnaire
provided above.
As from the table 2.1. We can see that the majority of responses are on the scale of 4 and
5 (i.e. Agree and Strongly Agree). So with the increase in technology in Nepal, the digital
literacy is also increasing by which the digital payment service providers have gateway in
the market supplying their digital currency with more security, convenience and other
features so on.
So, the sample collected shows that the digital wallets are to be developed, operated,
managed and raised in a systematic gradual process with the assistance and contribution
of both the government and private sector.
As access on the payment system is increasing, the use of different payment instruments
has also increased in Nepal. After the Covid-19 pandemic, instruments like connectIPS,
e-Wallets, Mobile Banking, Internet Banking, QR code, and Cards have widely been used
as customers can use these instruments in self-service mode. Further, e-commerce and
POS transactions have also increased after the pandemic. The usage of different payment
system instruments is presented in Table 2.1.1.
Post the COVID 19 pandemic, the use of faster payment systems like connectIPS, QR, e-
Wallets, Mobile Banking, and Internet Banking has sky-rocketed.
 19

CHAPTER III:
SUMMARY AND CONCLUSION

3.1. Summary
The purpose of the study is to examine the relationship, impact and differences between
the user's behavioral intentions to use digital mobile wallet. The study employs various
qualitative tools and techniques to determine the user's intention to use digital mobile
wallet such as descriptive research design.
The primary data was collected and analyzed in a systematic way to derive the findings.
In the study, the data was collected through a structured questionnaire and analyzed using
various techniques as reliability test analysis. On the basis of data analysis, the major
findings of the study are as follows.
 The shift from cash to digital payment within a short period of time is
recorded in which COVID 19 played an important role in reducing the cash
transaction and increasing the digital payments and digital transactions online.
 Although not specified separately the sample is selected with respect to age,
gender, organization, occupation and literacy rate.
 The Cronbach’s Alpha value was 0.822, which is higher than 0.7, the
minimum acceptable requirement so the research gets on going as per
reliability test.
 While the usage of POS is increasing, a decline in e-commerce or online
payments using cards has been observed. The number and value of online
payments using cards have reduced by 39.1 percent and 46.8 percent in
2021/22 as compared with 2020/21.
 20

 The study shows that the majority of users use digital wallet for utility
payment, online shopping and Travel & ticketing followed by retail counter
payments, insurance & Emi, School/college fees.
 As access on the payment system is increasing, the use of different payment
instruments has also increased in Nepal. After the Covid-19 pandemic,
instruments like connectIPS, e-Wallets, Mobile Banking, Internet Banking,
QR code, and Cards have widely been used as customers can use these
instruments in self-service mode.
 Various sets of questionnaires were flowed to 350 participants out of which
only 302 of them responded and their responses act as a base for research
results and analysis. So, the research is based on various hypothesis and
assumptions.

3.2. Conclusion
Using the suitable framework for this study, we were able to find the actual factors
and motivation for the emergence in the adoption of digital payment. We were able to
find the perceived risk of COVID along with other independent variables like
demography and literacy, resulting in factors like perceived usefulness and ease of
use of digital payment to accelerate the adoption of digital payment as shown in
figure 2.1. in the analysis part.
It also provides an insight into the perception of cash among respondents. The
research verifies the acceleration of digital payment adoption during pandemic and
factors enabling it in the context of Nepal. This can contribute to those who want to
get insight data, especially for digital payment service providers, to find the factors
and validate them with their tools. As the research used the TAM framework and
modified it to fit the requirement of the research, making it usable to various
researchers and students for digital payment acceptance in the future.
Hence use and adoption of digital payment system and the mobile digital wallets have
been a must in this modern era because of health safety, discount and rewards, wide
 21

spread availability, quick and easy accessibility, improved customer interface,

improved security, cost efficient and convenience.
 Bibliography

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Acceleration of Digital Payment Adoption during COVID-19 Pandemic: A Case Study of
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61(2), pp. 282- 291.

Yadav, P. (2017). Active determinants for adoption of mobile wallet. i-manager’s

Journal on Management, 12(1), 7-14.

Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of
information technology. MIS Quarterly, 13(3), 319-340.

Chawla, M., M. N. Khan, and A. Pandy. 2015. “Online Buying Behaviour : A Brief
Review.” AIMA Journal of Management and Research 9 (2/4): 1–17.

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Nepal Rastra Bank.( 2021-22). Payment-Oversight-Report.

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22_Final.pdf

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https://blog.esewa.com.np/aboutesewa
Esewa. (2020b). Digital Banking and Payment Trend in Nepal: Past, Present, and Future
- eSewa. Esewa Blog. https://blog.esewa.com.np/digital-banking-andpayment-trend-in-
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 Appendix

Annex 1

Questionnaire of the study

A Questionnaire on Digital Wallet And It’s Emergence in Nepal

PART A

1. Name (Optional): ...............................................................

2. Educational Level: .............................................................

3. Sex: a. Male b. Female

4. Age:

a. below or equal to 30

b. above 30

PART B

1. Which of the following do you consider as a Digital wallet?

o Purse/Physical Wallet
o Pocket
o Mobile banking
o Mobile Wallet
2. How many times do you use digital wallet in a month?
o Once in a month
o Weekly
o Daily
o Never

3. How many transactions do you perform using digital wallet during a month?
o 100
o 50
o 25
o 0

4. How frequently do you use Digital wallet?

o Once in a while
o Once in a day
o Once in a week
o Once in a month

5. I would find Digital mobile wallet useful in my payments & transactions.

o Stongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

6. Using Digital mobile wallet enables me to accomplish tasks of payment &

transactions more quickly.
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

7. Using Digital mobile wallet increases my productivity.

o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

8. If I use Digital mobile wallet, I will increase my ability to perform timely

transactions.
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

9. My interaction with Digital mobile wallet would be clear and understandable.

o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

10. It would be easy for me to become skillful at using Digital mobile wallet.
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

11. I would find Digital mobile wallet easy to use.

o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

12. Learning to operate Digital mobile wallet is easy for me.

o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

13. People who influence my behavior will think that I should use Digital mobile
wallet.
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

14. People who are important to me will think that I should use Digital mobile wallet.
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

15. The seniors in my organization have been helpful in the use of Digital mobile
wallet.
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

16. In general, my organization has supported the use of Digital mobile wallet.
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

17. I have the resources necessary to use Digital mobile wallet.

o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

18. I have the knowledge necessary to use Digital mobile wallet.

o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

19. Digital mobile wallet are compatible with other systems I use.
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree

20. A specific person (or group) is available for assistance with Digital
mobile wallet difficulties.
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly agree
 PART C

Survey on emergence of digital wallet

Statements Ratings Total Majority of
SDA DA N A SA Responses agreement
1. I would find 20 30 100 100 52 302 A
Digital mobile
wallet useful in
my payments
& transactions.

2. Using Digital 40 50 10 100 100 302 A/SA

mobile wallet
enables me to
accomplish
tasks of
payment &
transactions
more quickly.

3. Using Digital 2 80 20 50 150 302 SA

mobile wallet
increases my
productivity.

4. If I use Digital 10 20 10 200 72 302 A

mobile wallet,
I will increase
my ability to
perform timely
transactions.
5. My interaction 100 50 50 100 2 302 A
with Digital
mobile wallet
would be clear
and
understandable
6. It would be 55 75 20 100 52 302 A
easy for me to
become skillful
at using Digital
mobile wallet.

7. I would find 10 50 60 102 80 302 A

Digital mobile
wallet easy to
use.

8. Learning to 100 80 20 50 52 302 SDA

operate Digital
mobile wallet
is easy for me.

9. In general, my 10 20 30 100 142 302 SA

organization
has supported
the use of
Digital mobile
wallet.

10. I have the 5 25 70 100 102 302 SA

resources
necessary to
use Digital
mobile wallet.

11. I have the 25 12 3 160 102 302 A

knowledge
necessary to
use Digital
mobile wallet
 12. Digital mobile 10 2 3 85 202 302 SA
wallet are
compatible
with other
systems I use

Annex 2:
Number of Payment Instruments Issued by BFIs

Annex 3:
Number of ATM Terminals and Customers of Mobile and Internet Banking