Kathmandu — Fonepay Payment Service of Nepal and India’s NPCI International have formally switched on their new “Cross-Border QR” network, effective 21 May 2025. The rollout lets Indian travellers open any UPI-enabled app on their smartphones, scan one of the ≈1.6 million Fonepay QR codes spread across Nepal, and settle the bill on the spot.
How Cross-Border QR works
- Dual-currency settlement: Transactions clear simultaneously in INR and NPR under a pre-agreed forex window, eliminating rate guesswork and pushing funds to merchants in real time.
- Merchant fee: For now, Nepali shops pay a 1.95 % acquiring charge on each Indian-origin payment; revenue-sharing with Nepali banks will start once the service is mirrored in India.
Proven in pilot, ready for scale
A four-month pilot that began in March 2024 processed 100 k+ cross-border payments, convincing both partners that instant, “in-line” settlement is technically sound and commercially viable. Phase 1 now targets cash-heavy tourist hubs such as Thamel, Pokhara and Lumbini, helping micro- and small retailers go cash-light without installing costly card terminals.
Coming next: Nepalis paying inside India
Phase 2 will let Nepali customers scan ordinary UPI QRs inside India, once regulators on both sides sign off. Fonepay says it hopes to activate the feature before the end of 2025, creating a truly two-way digital rail across the open border.
Why Cross-Border QR matters
Fintech analysts describe the scheme as a “digital highway” that could tighten Nepal-India economic ties, lower foreign-exchange friction for tourists, and give small businesses a cheaper alternative to card POS devices. Nepal Tourism Board, which has been pitching “cash-lite tourism” for years, expects the service to boost spending certainty for the half-million Indians who visit Nepal annually and, eventually, for Nepalis heading the other way.
In short, a Cross-Border QR scan is now all it takes for Indian holiday-makers to pay for momo in Thamel — and, soon, for Nepali pilgrims to buy chai in Varanasi — without ever touching cash or a currency exchange counter.
