IMPACT OF DIGITAL WALLET (E-SEWA) IN NEPAL

A WINTER PROJECT

BY
AAKANCHHA PRADHAN
T.U. Registered Number: 7-2-1183-4-2016
Symbol number:
Balkumari College

Submitted to
Research / Examination Committee
MBA-FM Program
Balkumari College

Narayangadh, Chitwan
August 2022
 Declaration

I hereby declare that the winter project report work entitled “IMPACT OF DIGITAL WALLET
(E-SEWA) IN NEPAL” submitted to the office of the examination committee at Balkumari
college, Chitwan is an original piece of work under the supervision of Dr. Guna Raj Chhetri,
faculty member, Balkumari college, Narayangadh, Chitwan and is submitted in the requirement
of MBA-FM second semester. This project work report has not been submitted to any other
university or institution for the award of any degree or diploma.

Aakanchha Pradhan
Date: 24ᵗʰ September 2022
Abstract

Balkimari College Date Author

September 2022 Aakanchha Pradhan

DegreeProgramme
MBA Financial Management

Name of Thesis
IMPACT OF DIGITAL WALLET (E-SEWA) IN NEPAL

Supervisor Pages
Dr. Guna Raj Chhetri XX+6

This thesis aims to analyse and explain the phone payment system and impact of digital wallet
(E-Sewa) usage in Nepalese people. The primary focus of the study is to determine what
people think about the changes this gateway has brought in people's daily lives with its
features to pay the entire bill all over the nation. As this is a relatively new method of money
transaction this application works as a gateway in online payment systems, which is a massive
step in digitalizing the economy of the nation and going cashless. This study finds out that
people are aware of digital wallets and they feel the positive sides of digital wallets, however,
they do have fear of using them. The reason follows this fear that they don't have a clear idea
about the service, and hence, they fear making the most of digital wallets. Like E-Sewa,
Khalti, IME-pay, Connect IPS Etc. They are in a state of confusion hereby. Hence, the digital
wallet industry is suggested to come up with a border perspective with the vision of creating
demand for digital wallets in Nepal’s market.
 Acronyms

ATM Automated Teller Machine

NRB Nepal Rastra Bank

IME International Money Express

IPS Interbank Payment System

iOS iPhone Operating System

WiFi Wireless Fidelity

QR Quick Response

NFC Near-Field Communication

MST Magnetic Secure Transmission

POS Point Of Sale

UI User-Interface

RMIS Revenue Management Information System

SMS Short Message Service

EMI Equated Monthly Instalment

SPSS Statistical Package for Social Sciences

 Contents
Chapter 1
1.1 Introduction ✔
1.2 What is a Digital wallet/mobile wallet? ✔
1.3 Advantages and Disadvantages of Digital Wallets. ✔
1.4 Digital wallets in Nepal: How did it started? ✔
1.5 What services are available with the digital wallet? ✔
1.6 Objective of the study ✔
1.7 Significance of the Study ✔
1.8 Statement of problem and scope ✔
1.9 Limitation of the study ✔
1.10 Literature Review ✔
1.11 Research method ✔
1.12 Data Analysis tools and Techniques ✔

Chapter 2
Data presentation and analysis ✔
2.1 Profile of the respondent ✔
2.2 Challenges of digital wallets ✔
2.3 Major findings ✔

Chapter 3
3.1 Conclusion ✔
3.2 Action implications ✔
Appendix ✔
References ✔
 Lists of tables and figures

Figure 1 Gender of the respondent Page no.

Figure 2 Age of respondents Page no.

Figure 3 Educational level of the respondents' Page no.

Figure 4 Occupation of the respondents' Page no.

Figure 5 Purpose of eSewa Page no.

Figure 6 Feature of eSewa Page no.

Figure 7 The benefit of eSewa in daily e-commerce activities of people Page no.

Figure 8 E-Sewa as an emerging digital wallet Page no.

Figure 9 E-Sewa saves time and money Page no.

Figure 10 The Performance rating of eSewa Page no.

Figure 11 Refer eSewa to other people Page no.

Figure 12 Load funds in eSewa Page no.

Figure 13 Role of digital wallet in e-commerce Page no.

Figure 14 Time period using eSewa Page no.

Figure 15 Frequency of E-Sewa usage (A Month) Page no.

Figure 16 Monthly transactions on eSewa Page no.

Figure 17 Factors affecting the effectiveness of eSewa Page no.

Figure 18 Does eSewa provide more reach and frequency than traditional banking? Page no.

Figure 19 Did E-Sewa, do well according to your expectations? Page no.

Figure 20 Most Preferred E-Payment Gateway Page no.

 Chapter 1

1.1 Introduction

The invention of money has led to a substantial transformation globally, which supports solid
economic communication. After about 5000 years from that, the globe is getting digitalized in
terms of economy. From the economy of a private to a nation's economy, everything is in digital
form. Digital currencies like cryptocurrencies (Bitcoin, Ethereum), central bank digital
currencies, and stablecoins can build a more sustainable global economy. From the transactions
of a bank to the marketing of even small shops, the ticketing system, from aeroplanes to taxis,
the entire shopping markets, from buying and selling goods to the majority of daily expenses that
a person needs or a corporation needs, takes place virtually. Digitalization has several ways to
proceed, including ATMs, credit and debit cards, PayPal, E-Sewa, Khalti and a number of other
online and mobile payment software.

Nepal is a developing country in terms of both economics and digitalisation. Nepal is a country
where no Social Security system of numeration is applied to an individual citizen. In terms of
digitalization, only ATMs and card systems are implemented for financial transactions and still
online payment through credit or open-end credit isn't achievable. Cash payment was the only
source of a transaction between the customer and the merchant or perhaps within the individuals.
The information on the nation’s economy wasn't well documented and managed and there was a
fluctuation within the nation’s economy. There was a scarcity of safety and security as there was
an opportunity of accelerating robbery and theft with a cash payment method. The transparency
of the economy wasn't visible as there have been not any authentic documented records of the
transaction between any parties which made the economy of the state quite damaging. The
geography of the country as there are more hills and mountain terrains was also affecting the
nation’s economy to stay records.

To solve the above-mentioned problems E-Sewa plays a serious role in providing all the
protection and security needed for the country with the smoothness within the economy. the
prospect of theft and robbery is dropping back to the minimum, and it's easy to stay on the record
of the economy because the flow of cash is transparent. To decrease the difficulty of evasion and
other fraudulent activities, E-Sewa plays a good role. Through digital transactions, anyone living
either within the hills or within the mountains can send and receive payments with no difficulty
which helps to retain the record of the nation’s economy. The invention of the mobile payment
system in 2009 has changed the face of transactions dramatically.
Although in the beginning, it had been not that practical among all the citizens but slowly
because the world got into smartphones, every individual is absolutely ready to function
efficiently for each individual and established a comprehensive payment solution among
individuals and even firms.The digital wallet named E-Sewa is developed to send, receive, and
pay capital among individuals using smartphones and the internet. Nepal Rastra Bank (NRB) has
provided a license to develop its payment gateway system as a Payment Service Provider and is
officialised all over Nepal. Customers can use the application for various purposes, including
electricity bill payments, drinking water bill payments, mobile top-ups, TV payments, online
ticketing, online shopping, movie tickets, and school fee. Also, dealers, specialist co-ops, and
retail sources can quickly get instalments for merchandise and enterprises in their E-Sewa wallet.
Developed for both iOS devices and android devices, it also offers its services through the
primary web portal https://www.esewa.com.np, if a user wants to visit their website from any
personal computer. (E-Sewa 2019.)

People find using the mobile wallet easier than carrying cash for any transactions vendors find it
easier to receive payment through this wallet than a cash payment as it is easier, faster, and more
secure. Also, this sort of digital transaction prevents bacterial and viral infections as observed in
today’s time. From a nation’s economy to an individual’s economy, the digital economy is found
to be secure and preferable. Digital payment gateway is found to be effective for payment in
sectors such as large-value fund transfer systems, legal and regulatory framework, foreign
exchange settlement systems, retail payment systems, cross-border payments and international
remittances, payment system oversight, securities settlement systems, and cooperation, and
planned and ongoing reforms to the national payment system. (Timilsina 2019.)

The internet is proliferating in the past few years. The improvement of e-commerce throughout
the world thoroughly promoted the digitization of the digital payment process with various
online payment methods such as credit cards and debit cards, contactless payments, and mobile
wallets. The acceptance gained by such online payments, especially mobile payments, can be
noticed, as there is extensive web participation in people’s daily activities. Technology is the
leading factor in today’s era, every aspect of living is bound by technology. The entire universe
has dropped into every individual’s hands through smartphones and other mobile devices. In
layman's terms, for any money-related transactions, a platform has been established as a type of
inter-organizational information system that connects various associations and individuals, which
is called an online payment gateway, which uses the internet for its operations. (Becker 2007.)
1.2 What is a Digital wallet/mobile wallet?

A digital wallet is a business transaction application that runs on mobile devices. It securely
caches your payment information and passwords. These applications let you pay when you're
shopping using your device so that you don't need to carry your cards around. You enter and
cache your credit card, debit card, or bank account information and can then use your device to
pay for purchases. Digital wallets are applications designed to take advantage of the capability
of mobile devices to improve access to goods and services. Digital wallets essentially put an end
to the need to carry a physical wallet by saving all of a consumer's payment information securely
and compactly. (Julia Kagan 2022.)

Digital wallets use a mobile device's wireless capabilities like WiFi, magnetic signals and
Bluetooth to transmit payment data securely from your device to a point of sale designed to read
the data and connect securely through these signals.

Currently, the technologies used by mobile devices and digital wallets are:

● QR codes: QR (Quick Response) codes are matrix bar codes that store information. You
use your device's camera sensor and the digital wallet's scanning system to begin the
payment process.
● NFC: NFC (Near field communication) is a technology that allows two smart devices to
connect and transfer information using electromagnetic signals. It requires two devices to
be within about an inch and a half (4 centimetres) from each other to connect.
● MST: MST (Magnetic secure transmission) is the same technology used by magnetic
card readers that read cards when we swipe them through a slot at a point of sale. Our
phone creates this encrypted field that the point of sale can understand.

The card information you've cached in your digital wallet and choose to use for a transaction is
broadcasted from your device to the (POS) point of sale terminal, which is connected to the
payment servers. Then, through the payment servers, gateways, or any other type of third parties
involved in credit card or debit card transactions, the payment is routed through the networks and
banks to make a payment. (Julia Kagan 2022.)
1.3 Advantages and Disadvantages of Digital Wallets.

Well-timed payment is possible through e-Sewa, which enables customers to save repeating
payments and add periodical reminders and helps from being levied extra charges in case of late
payment. Some cashback, reward points and discounts are provided to the customers for timely
payment, as per the game plan provided by e-Sewa. Thus, e-Sewa plays a noteworthy role in
building on the nation's digital economy and supports the e-commerce business more securely
and suitably. (Regmi 2021.)

One of the most noteworthy precedences of digital wallets is that using one limits the amount of
personal and financial information you need to have on you as you carry on about your day. If
we keep all our documents in our digital wallets, then we no longer need to carry our physical
cards or physical wallet. There is zero chance of a card falling out of our wallet or of leaving our
card in the ATM slot. Additionally, we can't lose our entire wallets.
we don't necessarily need a digital wallet. However, they provide a convenient way to pay for
our purchases because we don't have to carry our credit and debit cards around with us. This also
increases our card security we can't lose our cards if we don't carry them.
Digital wallet apps like e-Sewa and Khalti do not require a bank account at a bank with physical
branches. Instead, we can place our funds in an online-only bank which empowers people living
in rural communities access to financial services, therefore enabling broader financial inclusion.

Every system if misused operates differently and is detrimental in various ways. It depends on
the end-user, and how they use the system. There have been zero complaints about the mobile
wallet as every individual is well pleased with the way it operates. E-Sewa officials have
mentioned that if any organizations or individuals attached to it find any bugs or technical errors
in the system and report them to the company, it will be their liberty to know such bugs and
rectify them. The one who finds the bugs will be rewarded with some monetary prizes or can
even get an opportunity to work with the company. (Prabin Belbase 2021.)

Security might become a problem if using a digital wallet from a provider that hasn't been vetted
or doesn't have established goodwill. If your phone isn't protected by biometrics or strong
passwords, you might risk giving someone else access to your financial details if you lose your
phone or someone tries to hack into it. Additionally, there might be local businesses you prefer to
shop at that don't yet have a point of sale (POS) terminal that accepts this technology. (Julia
Kagan 2022.)
1.4 Digital wallet in Nepal: How did it started?

Digital wallets have now become essential for payment more than grandeur. They are eliminating
the need to stay in line at the bank or offices to pay the bills and make our daily lives easy and
convenient. Digital wallets and online payment gateway service providers are making our daily
lives simple and saving us time. We can just pay our bills, pay for services and book tickets just
from our smartphones or computer. This is favourable for both end-users and service providers.
For many of us, it might have been a short time ago that we haven't been to any offices to pay
bills. This is all thanks to digital wallets, online digital payments and online banking services.
Currently, there are many smartphones and digital wallet applications in Nepal like E-Sewa,
Khalti, IME Pay, Prabhu Pay and Moru. Nepal can also become a cashless economy in the
future. Many other countries are shifting to contactless payment methods. Online payment is
increasing swiftly and the regular Nepal Rastra Bank (NRB) data also shows identical data. The
main convenience of online payments is accountability, transparency, real-time settlement,
buyers protection and ease of use. People are using many digital wallets and online payment
services these days. Almost all digital wallets provider offer the same services but they have
different user interfaces (UI), customer support, experience, and perks. Presently, there are
platforms that provide services through both smartphone applications aka apps and web portals.
The digital wallets that only serve through smartphone apps are mobile wallets while others that
service through both apps and web portals are digital wallets. (Prabin Koirala 2022.)

E-Sewa is a predominant name in the digital wallet market of Nepal. It is Nepal’s first digital
payment gateway service provider and the first online payment gateway to get a license from
Nepal Rastra Bank (NRB). The name eSewa is so general that people sometimes use the term
e-Sewa instead of an online payment gateway. The company began its journey in 2009 A.D and
it is a subsidiary of ‘F1Soft International’. Actually, F1Soft control both Fonepay and eSewa.
F1Soft also develop mobile banking applications for many banks in Nepal. So, they are a very
big financial technology company in the Nepali tech division.
They have the biggest number of downloads and reviews in the Apple app stores and Android
play store. The company also provides all their services from the web portal as well. E-Sewa web
portal has the highest traffic among all its competitors. All of this is due to their early head-start,
unparalleled service and reputation. The company provides a huge array of services from apps
and a web portal.
1.5 What services are available with the digital wallet?

E-Sewa offers an overabundance of services and payment methods to merchants or other

individuals. First and foremost there are tons of basic utility bill payment services. This includes
payments for a mobile top-up, water bill, NEA electricity bill, TV service, and Internet bills.
There is also a credit card payment service provided by many banks. People can also pay the
premiums for non-life insurance and life insurance. The mobile app also supports payments
using a Quick Response (QR code) scan with the aid of Fonepay.

E-Sewa supports payments to capital market companies, stockbrokers, Demat account renewal,
EMI of different financial institutions and Mero Share renewal. People can also pay for
government services such as foreign employment term insurance and Bluebook renewal. Other
government beneficiaries include the Merokitta survey department, Inland Revenue Department,
Revenue Management Information System (RMIS), Foreign employment welfare fund,
government fines and local government payments.

Travel and ticket booking are some of the well-built points of eSewa. They provide domestic
flight tickets, domestic bus tickets, and even international flight booking and international flight
purchase services. The company has partnered with many travel agencies, bus service
companies, and airline companies.

There is also support for paying tuition fees to many Montessori, schools, colleges, councils,
professional institutions and competitive exams. For entertainment, there are movie ticket
bookings at many cinema halls and movie theatres. This includes QFX, Big Movies, BSR
movies, FCUBE, Gopi Krishna, etc. People can also use eSewa to book appointments at
hospitals, hair salons, spas, restaurants and hotels. This helps in saving time and makes life much
easier for people. (Koirala, P. 2022.)

This is a very crucial feature that every digital wallet must have. Once in a while, it is very hard
to have a fast and secure internet connection. It is also advised to never use public WiFi or
unsecured WiFi to perform banking and critical financial transaction. Always use a secure WiFi
connection at the home or at the office, or just use mobile data. In the event neither of these
mediums is available, SMS mode is a life saviour. E-Sewa provides services such as mini
statements, mobile balance top-ups, balance inquiries, credit card bills, payment of electricity
and water bills, school fees, and EMI through SMS mode.
E-Sewa has collaborated with a large number of financial institutions and banks for banking
services. They provide direct bank linking for easy funds transfer and loading. They also support
loading funds using mobile banking, counter deposit, funds transfer and cash points. There is
also easy money transfer to Sahakri, banks and to other eSewa users. Remittance is also a very
popular service provided by the company. There are services from companies like eSewa Remit,
City Express and Western Union. eSewa Remit is a service provided to receive and send money
across Nepal. eSewa Money Transfer was established in 2019 and it has a license under foreign
exchange regulation from Nepal Rastra Bank.

E-Sewa provides cashback on multiple service payments. For example, there is cashback on
mobile balance top-ups, Aeroplane tickets and internet bill payments. Each payment also
provides a certain reward point which can be accumulated and redeemed in the future for
coupons and benefits. eSewa also runs many promotions and has promotional codes for different
events which can be redeemed as discounts or gifts. (Koirala, P. 2022.)

1.6 Objectives of Study

1. To know the business models of the Digital wallet payment gateway in Nepal
2. To enhance my knowledge in the Digital wallet industry.
3. To study the growth of Digital wallet payment gateway services.
4. Understanding the current market status of Digital Wallet payment in Nepal.
5. To discover the new trends of the demographic shift that have impacted Digital wallet
usage.
6. To study the services provided by the Digital wallet providers and the services used by
the Digital wallet users.
7. To find out the awareness and preferences of the users towards Digital wallet service
providers.
1.7 Significance of the Study

Digital wallet is a way of doing modern online transactions through smartphones or computers.
A digital wallet can manage all our daily transaction needs 24 hours a day 7 days a week with its
payment gateway. With its help, we can make financial transactions from anywhere, where the
internet or mobile network is available. In addition to getting automatic deposits, a digital wallet
also includes automatic bill payments. It is hoped that the adoption of this study’s findings and
recommendation is to contribute to the effort towards the adoption of digital wallets and identify
best practices in offering digital wallets products as well as constraints that impede growth so as
to draw relevant policy implications. This will in turn help people decide whether to use digital
wallets or not.

Nepalese digital wallet applications will be able to provide quality services to their customers
and even encourage more people in using digital wallets and increase investment in it. The
digital wallet organizations in Nepal will also have a benchmark for measuring their digital
banking services and their financial performance. And this research report will also provide
benefits to other people due to digital wallets service to carry out their transactions from the
comfort of their home, workplace or anywhere with an internet connection hence saving on time
and resources; They will also gain a better understanding of how to carry out better online
services. This study will also provide the necessary data to the government to help them in policy
formulation and also enable them to be able to control its finance efficiently and hence be
efficient in regulation.

In the context of Nepal, most people may not be aware of the digital wallet service system.
Therefore, this study will help them to know about the digital wallet services available to them.
Whereas this research report will help digital wallet service providers to improve their services
and help them appeal to a wider demographic especially if they adopt the recommendations. And
this research will be used by other future researchers who would be interested in this area of my
research.
1.8 Statement of problem and scope

Although digital wallet and mobile wallet in Nepal is still in phase of infancy. People are
unaware of the significance of digital and mobile wallets. The application of digital wallets and
mobile wallets in Nepal faces numerous hurdles in its way as a result of which Digital wallets are
not very popular in Nepal.

Nepal, overall literacy rate is 63% but the knowledge of computers and banking is very less,
some of the new generations have ideas about computers and some of them have knowledge of
online transactions but young people are using the Internet and smartphones just for social sites
and not for digital wallets or online banking. People are very reluctant when it comes to online
banking in Nepal.

E-Sewa is trying its best to maximize the service to the rural area, but the government is not
offering internet facilities because of which people are only limited to traditional banking.
Secondly, Government should switch to optic fibre lanes for internet services in urban and
provide good alternatives to rural areas as well. Like providing internet facilities with the
collaboration of telephone lines and cheap data over the cell network in rural areas. (Ansari, J.
H., & Khan, H. A. A. 2019.)

1.9 Limitation of study

1. The sample size taken for the study is based only on the consumers, agents, and
merchants residing inside Chitwan and does not include all demographic aspects. So, the
sample used for the study is small and does not cover all types of consumers.
2. The research that we conducted includes the use of online survey forms. So, some
responses to those surveys may not be valid.
3. Some respondents did not give information because of their busy work schedules.
4. Since the survey is also based on the sampling method, it does not disclose the character
of the entire customer.
5. During the field visits, companies were too reluctant to provide information on mobile
payment, as it is a relatively new sector with many opportunities and beginners. This
created a lot of difficulties in collecting authentic and clear information on the same
system of a digital wallet.
6. Some of the main merchants and agents refused to provide us with any information as
they didn’t want to disclose any information regarding their company.
1.10 LITERATURE REVIEW

Literature review describes the study of prior research and documents. Researchers should find
out the study gap from the review of the literature. In the early 2000s, globally businesses were
going online. While the digital revolution was just around the corner, it had a very low impact on
Nepal. There were few alternative payment methods offered by Banks like Credit Cards and
Debit Cards. As the mobile phone was getting popular and more affordable, Banks used SMS as
the primary channel to notify and alert customers about banking transactions. This immediately
created an atmosphere of trust and security among customers. Banks added more features and
transactional services later in 2007. It was also well received by banked customers. However,
realising that less than 20% of the population had bank accounts and that these services could do
so much more, e-Sewa planned to introduce mobile wallets in Nepal. This also coincided with
global business trends and the need for a payment gateway for the growth of e-commerce. eSewa
was developed and introduced in Nepal when there were very few companies trying to go online.
Internet penetration was very low and banking services were limited in terms of availability and
scope. eSewa has played a vital role to grow digital commerce businesses in Nepal by providing
a secure and fast online payment mechanism.

Kowsalya, Krishnan, Mridhula, and Sowmya (2017) who described online purchasing behaviour
undertook a convenience sampling where 100 undergraduate students were selected; and writers
concluded that most students buy books, clothes, travel bookings and computer hardware.
Moreover, the study showed that website quality and 79 purchase perception have a significant
relationship with online shopping. Rouibah (2015) indicated that inferior security, high charges,
insufficient trust, fear of failure and poor familiarity were the major restriction that affected
digital transactions. Krishnamoorthy and Srinivason (2013) found that banks are finding a
struggle in keeping hold of their existing customers, for which either they need to come up with
customized products, innovative or they need to develop trust with their customers and maintain
their relationships. Dangol and Kautish (2019) deduced that there is a notable difference between
educated customers and the adoption of digital payment. The perception of customers for digital
payment has a positive and significant effect on the adoption of digital payment among
customers. Efforts have been made to clarify perplexing findings but failed to provide a
satisfactory statement for the paradox of the contended educated customers and adoption of
digital payment (Rajanna, 2018). Rigopoulos and Askounis (1970) come up with consumer
perception of digital payment mode that how the customers' perception of digital payment affects
their daily lives. Researchers deduced that there is no consequential divergence in consumer
perception based on demographic factors such as gender age, profession and annual income.
However, education was found to be a significant influence on the adoption of digital payment.
Oney, Guven and Rizvi (2017) have investigated that there is need how to create trust in digital
payment systems, customer interest in using electric payment and the importance of security in
electric payment systems as they can affect users' trust.
1.11 Research method
This chapter deals with the procedure that was used in conducting the study. It sets out the
various stages and phases that were followed in completing the study. It identifies the procedures
and techniques that were used in the collection, processing and analysis of data. The following
sub-scenario was included; research design, target population, sample design, data collection and
analysis.

1.11.1 Research design

Research designs the plan, structure and strategy of investigation conceived to obtain answers to
the research question and to control variance. The plan is the all-inclusive scheme or program of
the research. A research design expresses both the structure of the research design problem and
the plan of investigation used to obtain evidence or relation to the problems.

Research design can be defined as a plan used for data collection and utilization in order to
obtain desired information with accuracy or for a researcher to test their hypothesis sufficiently.
This particular research used several methods to make sure that the information was accurate and
comprehensive (Wetherbe, 2012.)

To conduct the study, two types of approaches have been adopted descriptive and analytical. The
descriptive approach has been utilised mainly for the conceptualization of problems. The
analytical approach is used to find out results employing financial as well as statistical tools. So,
the study emphasises descriptive and analytical research designs.

1.11.2 Population and sample

The population of the study is “150” people where 80 were females and 70 were males of
different gender, ages, education groups and professions.

1.11.3 Sources of the data

Both primary and secondary data, have been collected in order to achieve the real and factual
results of this research. All possible and beneficial data accessible have been collected. The
provenance of data is as follows:

1.11.4 Primary source

The primary data are collected from the primary source. The primary source of data is the
opinion survey through the questionnaire. field visit and statistics obtained from the respondents.

1.11.5 Secondary sources

Secondary data are collected from secondary sources. The secondary data sources are the
information received from books, journals and articles concerned with the thesis, google Scholar
and other websites
1.12 Data Analysis tools and Techniques
This study utilized both primary and secondary techniques. Primary data was used including
personal interviews with respondents as well as questionnaires. Secondary data utilised included
the E-Sewa website, Google scholar and other journal websites. The statistics obtained were
refined and analyzed using SPSS. This involved data coding, editing and tabulation especially
quantitative data. The objective of all these is to make the statistics clear and comprehensible for
other individuals. Different quantitative methods of statistical tools have been used for driving
the essence of the research data and interpreting them in a meaningful way.

Chapter II

Data Presentation and Analysis

This chapter presents the data analysis results, interpretation of the results and discussion. Data
analysis was done using SPSS and questionnaires were delivered through google Forms with
these analysis tools being descriptive statistics, correlation analysis and multiple regression
analysis. This research aimed at finding out the impact of digital wallets (e-Sewa) in Nepal.

2.1 Profile of the Respondent

2.1.1 Gender of the respondent

Figure 1: Gender of the respondent

Figure 1 shows that 46.7% of respondents were male while 53.3% were females and none
were of another gender. This shows that there is an inclusion of both genders of
respondents. This was confirmed by the responses from the questionnaires filled by the
participants'
2.1.2 Age of respondents

Figure 2: Age of respondents

The above figure 2 shows that 6.7% of the respondents were between 15-20, 53.3% were
between 21-25, 29.7% were between 26-30, and between 13.3% were above 31 years old.
This implies that there was a fair representation of the population as almost all age groups
of people were represented and the data provided reflected the views of the entire
population the majority of the respondents were mature which means they can provide an
accurate depiction of the world view on digital wallets.

2.1.3 Educational level of the respondents

Figure 3: Educational level of the respondents

The above figure shows that 6.7% of the respondents were at the SLC level, 13.3% were
at the Intermediate level (+2), 26.7% were at Bachelor level, 53.3% were in Masters level
and none were at Masters and above. This implies that the respondents are well-educated
which means they could read, understand and interpret questionnaires reliably, The data
collected is believed to be reliable and was thus processed to present the findings.
2.1.4 Occupation of the respondents

Figure 4: Occupation of the respondents

The above figure shows that 40% were Students, 0.00% were professors, 40% were Job
holders, 6.7% were businessmen, And 13.3% were from Other backgrounds. This implies
that this study incorporates people from different walks of life and thus brings forth
diverse inhabitants of our society.

2.1.5 Purpose of eSewa

Figure 5 Purpose of eSewa

The above figure shows for what purpose people use eSewa 53.3% use it for Bills
Paying, 33.3% use it for Shopping, 6.7% use it for Bus and air tickets, and 6.7% use it for
Business purpose. As we can see from the data we collected people use eSewa for diverse
purposes.
2.1.6 Feature of eSewa

Figure 6 Feature of eSewa

The above figure shows which feature people like the most 40% like the Cashback
feature, 13.3% like the Reward system, 26.7% like Mobile top-up, and 20% like Discount
on payment provided in the payment gateway.

2.1.7 The benefit of eSewa in daily e-commerce activities of people

Figure 7 The benefit of eSewa in daily e-commerce activities of people

The above figure shows which benefit provided by eSewa is appreciated by their
customers, 33.3% prefered Fast transactions, 20% preferred 24 hrs service, 26.7%
preferred Saved time and money and 20% prefered Made digital friendly.
2.1.8 E-Sewa as an emerging digital wallet

Figure 8 E-Sewa as an emerging digital wallet

From the above figure we can interpret that people view eSewa as an emerging digital
wallet in Nepal as they responded all in favour of eSewa and all their responses ranged
from agreeing to strongly agree.

2.1.9 E-Sewa saves time and money

Figure 9 E-Sewa saves time and money

From the above figure we can interpret that people view eSewa as saving them time and
money as they responded all in favour of eSewa and all their responses range from
agreeing to strongly agree on.
2.1.10 The Performance rating of eSewa

Figure 10 The Performance rating of eSewa

From the above figure we can interpret that people are highly satisfied with the service
eSewa provide them with as they responded all in favour of eSewa and all their responses
range from agreeing to strongly agree on.

2.1.11 Refer eSewa to other people

Figure 11 Refer eSewa to other people

As we can see from the above diagram almost all the respondents exhibited to refer
eSewa to their friends and families. With a few expectations.
2.1.12 Load funds in eSewa

Figure 12 Load funds in eSewa

As we can observe 60% of the participants load funds through Bank accounts, 13.3% of
the participants load funds through E-Sewa local agents, 20% of the participants load
funds through Funds transfer and 6.7% of the participants load funds through Other
means. From the above figure, we can see that the majority of people load funds in eSewa
through a bank account and the runner-up is funds transfer.

2.1.13 Role of digital wallet in e-commerce

Figure 13 Role of digital wallet in e-commerce

From the above figure we can interpret that people trust that digital wallet providers play
a crucial role in our new and swiftly digitalizing economy as they responded all in favour
of significantly to highly significant.
2.1.14 Time period using eSewa

Figure 14 Time period using eSewa

As we can observe 13.3% of the participants have been using eSewa for A Year, 66.7% of
the participants have been using eSewa for 1-5 Years, 13.3% of the participants have been
using eSewa for 5-10 Years and 6.7% of the participants have been using eSewa for 10+
Years. The majority of the respondents have been using eSewa for more than a year but
less than 5 years.

2.1.15 Frequency of E-Sewa usage (A Month)

Figure 15 Frequency of E-Sewa usage (A Month)

As we can observe 26.7% of the participants use eSewa 1-10 times a month, 20% of the
participants use eSewa 10-20 times a month, 33.3% of the participants use eSewa 20-30
times a month and 20% of the participants use eSewa 30 and above.
 2.1.16 Monthly transactions on eSewa

Figure 16 Monthly transactions on eSewa

As we can observe13.3% of the participants have a transaction less than 1000, 26.7% of
the participants have a transaction of 1000 - 5000, 13.3% of the participants have a
transaction of 5000 -1000, 13.3% of the participants have a transaction of 10000 - 15000
and 33.3% of the participants have a transaction of 15000 + from the above data we can
interpret that majority of respondents to transact in the bracket of Rs.15000+ and
Rs.1000-5000 monthly.

2.1.17 Factors affecting the effectiveness of eSewa

Figure 17 Factors affecting the effectiveness of eSewa

From the above diagram we can observe that the major factors affecting the effectiveness of
e-Sewa are the availability of the internet receiving 53.3% of total responses while the reliability
of the mobile network and lack of acceptance both received 20% of total response while security
problem is the least factor affecting the effectiveness of e-Sewa only receiving 6.7% of total
response
2.1.18 Does eSewa provide more reach and frequency than traditional banking?

Figure 18 Does eSewa provide more reach and frequency than traditional banking?
As we can see all the respondents think eSewa provides more accessible and more frequent
transactions than the traditional banking system.

2.1.19 Did E-Sewa do well according to your expectations?

Figure 19 Did E-Sewa, do well according to your expectations?

From the above figure, more than 90% of respondents agree that eSewa performed according to
their expectations. Whereas for less than 10% of respondents eSewa hasn’t performed according
to their expectations.
2.1.20 Most Preferred E-Payment Gateway

Figure 20 Most Preferred E-Payment Gateway

According to the respondents 73.3% of them prefer eSewa, 6.7% preferred IME Pay, 13.3% of
them preferred Khalti, 6.7% preferred Connect IPS. According to our data around ¾ of our
respondents prefer eSewa whereas all other competitors only have a total of ¼ of the market.

2.3 Findings and discussion

● Most of the respondents were of age between 21-25 years old

● Most people use eSewa for bill payment and shopping purposes while people using
eSewa for business purposes is seen less than for other purposes
● The cashback feature of eSewa is more popular than the other features such as Reward
system offer, mobile top-up, and discount on payment.
● Majority of people strongly agree that eSewa is an emerging digital wallet.
● Most people agree that eSewa has made their life easier by saving time and money.
● It is found that eSewa has got the majority rating of 10 & 9 by the majority of the
respondents based on its performance.
● Respondents who referred others to use eSewa are higher than those who didn’t.
● Most people use bank accounts to load funds in eSewa rather than through eSewa local
agents, fund transfers or others.
● People who agree that digital wallet has a role in e-commerce is higher.
● Majority is with people who have used eSewa for 1-5 years.
● The Main benefit of eSewa in daily e-commerce activities of people is Fast transactions.
● ¾ of the respondents prefer eSewa and other digital wallets.
 Chapter: III

Conclusion and Practical Implications

This chapter present the study's conclusion and practical implications based on the objective of
the study. The objective of this study was to find out the impact of E-Sewa and also probe the
challenges and prospects of digital wallets in Nepal. Conclusions and practical implications are
put forward accordingly.

3.1 Conclusion

The objectives of this research are to find out the purposes of using digital wallets eSewa in
commercial activities of people in Nepal. From the research, it is concluded that people use
eSewa mainly for bill payments. E-Sewa is really important to the majority of people. The main
features people like about eSewa are cashback, Reward system, Mobile top-up, Discount on
payment, etc. The major impact eSewa made in the respondent's daily activities is fast
transactions and saving time and money. It is clearly seen that people who agree as eSewa is an
emerging digital wallet are higher than people who disagree. Respondent's life is easier by using
eSewa it helped with fast transactions and saves time and money.

Most of the respondents rated eSewa performance as 9-10 which means it has got a high rating.
Respondents who referred others to use eSewa are higher than people who don’t. From the
research, it is found that people mainly load their balance in eSewa from a bank account. Digital
wallet has played a great role in Nepalese e-commerce at the present time because people are
being digital friendly and are seen as more comfortable using electronic devices. E-Sewa is just
emerging at present because there is the majority of people using eSewa for 1-5 years. After the
results are taken it can be concluded that eSewa is emerging day by day.

There is started to see the importance of eSewa in the daily activities of people. People have now
started to pay the bill of electricity, drinking water bills, and telephone bills from eSewa which is
an immense change in the commercial activities of people. Before people used to wait in queues
for hours to pay their household bills but now after the launching of eSewa as Nepal`s first
online payment gateway it has been so easy for the people of Nepalese society. Life has been
easy and comfortable with the use of eSewa.
3.2 Actions implications

● It should focus more on the business purpose by giving better services to the business
persons.

● Cashback offers should be improved on payment.

● Benefits like fast transactions, 24 hours service and being made digital friendly should be
more focused.

● In order to be more competitive in the market, more features and security should be
improved.

● The other ways to load funds in eSewa should be increased rather than only focusing on
the bank load.

● It shows people who started using eSewa in 1-5 years or less high so, it should be more
focused on retaining and growing more customers.

● The dealer's and supplier's links with eSewa should be increased so that customers can
pay through eSewa easily.

● E-Sewa should improve the offline bill payment system.

● More offers and reward systems should be increased and improved for retaining
customers as customer satisfaction is the key factor.

● New features should be added so that more customers would be attracted.

Appendix
Questionnaire for respondents

Dear Sir/Ma’am
I’m an MBA-FM student of Balkumari College affiliated with Tribhuwan University, Central
Department of Management, Kritipur and conducting a study on the “Impact of Digital wallets
(E-Sewa) in Nepal”.These questions pertain to your experience with the issue. Your answers will
be kept strictly confidential and will only be used for this research purpose
1. Age:
15-20
21-25
26-30
31 and above

2. Gender:
Male
Female
Others

3. Education:
SLC
Intermediate (+2)
Bachelor
Masters
Masters and above

4. Occupation:
Student
Professor
Job holders
Businessman
Others

Specify if comfortable
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
5. Purpose of eSewa
Bills Paying
Shopping
Bus and air tickets
Business purpose

6. Feature of eSewa
Cashback
Reward system
Mobile top-up
Discount on payment

7. The benefit of eSewa in daily e-commerce activities of people

Fast transactions
24 hrs service
Saved time and money
Made digital friendly

8. E-Sewa as an emerging digital wallet

Strongly disagree
Disagree
Neutral
Agree
Strongly agree on

9. E-Sewa saving time and money

Strongly disagree
Disagree
Neutral
Agree
Strongly agree on

10. The Performance rating of eSewa (on best to worse from 1 to 5 rating)
1
2
3
4
5
11. Refer eSewa to other people
Yes
No

12. Load funds in eSewa

Bank account
Esewa local agents
Funds transfer
Other

13. Role of digital wallet in e-commerce

Highly insignificant
Insignificant
Neutral
Significant
Highly significant

14. Time period using eSewa

A Year
1-5 Years
5-10 Years
10+ Years

15. Frequency of E-Sewa usage (A Month)

1-10
10-20
20-30
30 and above

16. Monthly transactions on eSewa

Less than 1000
1000 - 5000
5000 -1000
10000 - 15000
15000 +
17. Factors affecting the effectiveness of eSewa
Availability of internet
Reliability of mobile network
Security problems
Lack of acceptance

18. Does eSewa provide more reach and frequency than traditional banking
Yes
No

19. Did eSewa do well according to your expectations

Yes
No

20. Most Preferred E-Payment Gateway

E-Sewa
IME Pay
Khalti
Connect IPS
Any other
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