Exploring the Impact of Online Payment on Consumer Behaviour: A Case Study of Nepal

Exploring the Impact of Online Payment on Consumer Behaviour: A Case Study of Nepal

Dharmaraj Rijal¹

¹UG Scholar, Liberty College Affiliated to Pokhara University

Anamnagar, Kathmandu.

INTRODUCTION

The emergence of online payment has completely changed how consumers and businesses interact on a global scale. Online payment refers to payment that are made for goods or services that are ordered online or offline and are initiated using internet. Understanding how digital financial services affect consumer decision-making is becoming more and more crucial, especially in developing nations like Nepal. In Nepal, Nepal Rastra Bank (NRB) is dedicated to the security and effectiveness of Nepal's National Payments System (NPS) in recognition that payment systems are an essential component of every nation's financial system and are essential for its soundness, as well as for the execution of monetary policy and the growth of capital markets.

The rise in e-commerce and mobile commerce activities in recent years can be attributed to the widespread use of mobile devices and internet connectivity. Research has indicated that the incorporation of electronic payment systems might have a noteworthy impact on consumer conduct, providing convenience and effectiveness during transactions (Jakhiya et al., 2020). Given the dynamic nature of Nepal's digital infrastructure, analyzing the differences in the adoption of these technologies and the ensuing shifts in customer behaviour might yield insightful information.

The Nepalese payment system began in 1990 when digital payments were introduced, and Nabil Bank was the first to offer card banking services to the general public. The digital banking scene was further advanced by further technologies like internet banking in 2002 and SMS banking by Kumari Bank and Laxmi Bank in 2004. In 1995, Himalayan Bank installed the first ATM in the country. The goal of the 2016 Smart Choice Technology (SCT) was to standardize card banking services between financial organizations. But in 2009, e-sewa upended banks' control over the payment system, allowing for peer-to-peer smartphone transactions devoid of conventional banking middlemen. In order to update cheque-clearing services, Nepal Clearing House Ltd. (NCHL) was founded in 2008. The National Payments System Development Strategy was created in 2014 as a result of the central bank giving modernizing the payment system top priority due to the growth of mobile wallets and greater international financial integration. This approach created regulatory control, encouraged the development of payment infrastructure, and gave non-bank institutions the ability to participate in payment operations. Online payment system is the best system for financial transactions. In Nepal many online payment systems have been raise such as eSewa Nepal, Khalti, IME Pay, MyPay, Sulav Pay, Namaste Pay, banking app and so on.  As a result, the payment landscape is experiencing a significant transformation, with mobile banking and electronic wallets positioning themselves as indispensable tools for contemporary financial transactions (Al-Sabaawi et al., 2021; Alkhowaiter, 2022; Bagla & Sancheti, 2018; Teoh et al., 2013).