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REPORT ON FINTECH
In context of Nepal

JULY 17, 2020

AASHISH WAGLE
BitsBeat, New Baneshwor, Kathmandu
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Contents
What is Fintech? ....................................................................................................................2
Global Fintech .......................................................................................................................2
Fintech in Nepal .....................................................................................................................2
1) F1Soft ...........................................................................................................................3
2) e-Sewa ..........................................................................................................................3
3) SB Solutions .................................................................................................................3
4) Khalti ............................................................................................................................4
5) Prabasi Ko Saath ...........................................................................................................4
6) Helpbegin .....................................................................................................................4
7) Nepal Data Systems ......................................................................................................5
8) Swastik .........................................................................................................................5
9) AakashPay ....................................................................................................................6
10) Banqsys .....................................................................................................................6
Challenges of Fintech ............................................................................................................6
Recent Update on Fintech in Nepal.......................................................................................7
Future of Fintech in Nepal ....................................................................................................7
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What is Fintech?
Fintech is a combination of technology and financial services that’s transforming the way financial
businesses operate, collaborate, and transact with their customers, their regulators, and others in
the industry. All types of companies, from startups to tech companies to established firms, are
using fintech. It is a broad term that encircles a multitude of technological innovations that has
happened in the financial sector such as POS, Payment Gateways, Digital Banks, Digital Wallets,
blockchain-based cryptocurrencies.

Global Fintech
Both the developed world and developing world are simultaneously taking up Digital Payment
Services and Mobile Technology suitably for financial transactions. As per CGAP’s report
financial transactions through mobile technology has already crossed US$ 1 trillion in 2012 and
further growth is very promising. Payment giants like VISA International and Master Card
International have already entered into mobile based products and likewise we are seeing a lot
more Financial Institutes also creating innovative and efficient financial products.

The global fintech market was valued at about $127.66 billion in 2018, and is expected to grow
to $309.98 billion at an annual growth rate of 24.8% through 2022. Growth in the digital payments
sector is driving the market for global Financial Technology. Fintech has made payments for goods
and services faster, easier, more convenient, and cost-efficient for customers. Customers can now
pay for various goods and services via cryptocurrency, loyalty points, and other digital cash
alternatives. The growth in the digital commerce market and proliferation of mobile technology
has contributed to the growth of the digital payments sector. For instance, companies such as
Square and Stripe provide portable Point-of-Sale (POS) systems which can instantly read and
process touchless payments like Apple Pay, along with credit cards, and even some mainstream
cryptocurrency wallets. In 2018, PayPal, a fintech payments company, increased its account base
by 17% over 2017, reaching 267 million active accounts, with a record 13.8 million added in the
fourth quarter alone. As an increasing number of businesses are adopting digital payment systems,
the demand for fintech solutions is increasing and driving the growth of the market.

Fintech in Nepal
Here we talk specifically about Fintech in Nepal. There are 39 Fintech startups in Nepal. Some of
them with their basic information are described below:
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1) F1Soft
mobile/internet banking product

F1soft is a software development firm providing mobile/internet banking product for banks in
Nepal. The products include BankSmart - for mobile banking, Bank-ex for online banking,
FoneBank - another mobile banking solution, e-Sewa - an online payment gateway, SMS banking
and card management products. The company claims to lead the market with almost 90% of
Nepal’s financial institutions are using at least one of their transaction banking products.

Company Overview

Founded Year :2004

Location: Kathmandu, Nepal

Investors: Kantipur Media Group

2) e-Sewa
Online and mobile wallet

eSewa is a semi-closed KYC-enabled wallet in Nepal, which can be accessed on the web or mobile.
The account can be recharged via net-banking and cards, or at offline cash-points, and can be used
to pay on partner websites and P2P transfer.

Company Overview

Founded Year: 2010

Location: Kathmandu, Nepal

Investors: GSMA

3) SB Solutions
Loan life cycle management software

SB Solutions provides loan life cycle management software to financial institutions. Its features
include loan origination, workflow management, document collection, credit risk assessment, and
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more. It also provides Digital Vault System that enables to scan the metadata such as client name,
loan limit, type of credit exposure, and more.

Company Overview

Founded Year 2017

Location: Kathmandu, Nepal

4) Khalti
Digital wallet solution.

Khalti is a semi-closed digital wallet solution for payments in Nepal. Enables payments of mobile,
DTH, water, shopping, airline/movie tickets as well as initiate P2P transfers. Users can register
with Khalti, post verification they can load the wallet via e-banking/receipts from friends and make
paymnets. Uses encryption to secure transaction data.

Company Overview

Founded Year: 2016

Location: Lalitpur, Nepal

5) Prabasi Ko Saath
Financial education app for migrant workers

Prabasi Ko Saath is a financial education app for migrant workers. The app provides information
on foreign employment process. It facilitates the comparison of the financial status pre and post-
employment. It helps users to make better financial decisions through calculating costs and foreign
employment income, expenses and savings. The app is available for iOS and Android platforms.

Company Overview

Founded Year : 2016

Location: Nepal

6) Helpbegin
Crowdfunding platform for charitable projects.
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Helpbegin is crowdfunding platform for charitable projects and social causes. Some of the
categories for which funds are raised on the platform include education, environment, health,
technology, non-profits.

Company Overview

Founded Year :2012

Location: Kathmandu, Nepal

7) Nepal Data Systems

Web-based software for insurers and banks

Nepal Data Systems is an IT service provider specialized in developing and implementing business
and banking software. Offers expertise in software development, IT support and consultancy
services, website registration, web hosting, mobile apps graphics & logo designing, and digital
marketing. Apart from banking & insurance, it has domain knowledge in inventory management,
accounting, CRM, project management, digital and social media marketing, and SMS banking.
Clientele includes National Life Insurance Company Limited, Wildlife Conservation Nepal
(WCN), Central Finance Limited, and other.

Company Overview

Founded: 2002

Location: Kathmandu, Nepal

8) Swastik
Swastik provides an online accounting solution to companies. Features invoicing, accounts
receivables and payables management, inventory management, bank reconciliation, general
ledger, bookkeeping etc.

Company Overview

Founded Year 2018

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Location: Kathmandu, Nepal

9) AakashPay
AakashPay is a white-label (A white-label product is a product or service produced by one
company that other companies rebrand to make it appear as if they had made it). mobile payment
platform. Offers a virtual wallet allowing users to store wallet contents in a digitized form. Enables
cardless ATM cash withdrawals by customers. Services offered include top-up mobile airtime,
biller/merchant payments, P2P money transfer, etc. Offers savings account services and enables
interest payment on deposits to individuals forming savings groups. Provides open and closed loop
payment cards.

Company Overview

Founded Year: 2016

Location: Nepal

10) Banqsys
Banqsys offers a core banking system that enables banks to manage deposit, loans, overdrafts,
and other financial products. Offers a dashboard which enables users to define and view various
KPIs, metrics, and reports. Also offers modules for internet/ mobile banking, CRM, calendar,
task management, etc.

Company Overview

Founded Year: 2017

Location: Kathmandu, Nepal

Challenges of Fintech
Various research has suggested different challenges that Fintech companies face. The major
challenges are:

 Credibility
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This is the most prominent challenge of any innovation, and it holds for fintech too. Since it is
money we’re dealing with, most people still lack the trust component to rely on fintech to simplify
their financial operations. Gaining the confidence of people and have them trust your product that
is unfamiliar, takes a lot of time and effort.

 Discovery

You may have a solid product that works very well; you may have gained the trust of a good
number of people to start with, who use your product. Getting your product discovered amongst
the competition is definitely a challenge.

 Customer relationships

Every business out there requires customers, of course. If you want your customer-base to stick
with your product and keep coming back, you need to make sure you retain your customers for the
long run by building long-term customer relationships.

Recent Update on Fintech in Nepal

As per the article published on http://kathmanduonline.gov.np/ yesterday i.e. 16th of July,
Kathmandu Metropolitan city is trying to come up with Automatic Fare Collection( AFC). An
automated fare collection (AFC) system is the collection of components that automate the ticketing
system of a public transportation network - an automated version of manual fare collection.
Representatives of Fintech International presented regarding AFC in the room of Chief
Administrative Officer. Aryal, CAO of metropolitan said they have prioritized AFC to ensure
contactless service during this pandemic to reduce its risk. By implementing this service, the fare
collected shall be directly mentioned in the bank account of concerned parties. It shall also help
them analyze what age group travels during which time and activities during the pick hour. An
additional chip enabled to ATM shall be more effective for this technology.

Future of Fintech in Nepal

Fintech will rise but people won’t use digital wallets in their current form. Fintech, still being at
its early stage of adoption, will raise questions and eyebrows from most people. While its
advancements are disruptive, the focus of any Fintech company should be about educating people
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about the concept. FinTech is an inevitable future Nepal will lead towards, this pandemic will
make us more digital. This pandemic will act as a catalyst towards accelerating digital
transformation. In the long run, the company that earns public trust will rise to the top. Instances
like web portal hack of Kathmandupress and suspected involvement of companies like F1Soft
won’t do better to gain customer support and public trust.