Nepal's payment infrastructure reached a genuinely significant milestone in June 2026: its National Payments Interface went live with a direct real-time link to India's UPI, letting users in both countries send P2P remittances using virtual payment addresses instead of full bank details. That's a meaningful moment for one of South Asia's largest remittance corridors â but it's built on top of Nepal's own domestic infrastructure, which has its own real-time retail switch and separate high-value settlement layer worth understanding on their own terms.
The short version
Nepal's payment infrastructure is regulated by Nepal Rastra Bank (NRB) and largely implemented through Nepal Clearing House Limited (NCHL), operating under the National Payment Switch (NPS) framework:
- RTGS â NRB's real-time gross settlement system, for high-value and urgent interbank transactions.
- RPS (Retail Payment Switch) â the real-time, interoperable engine behind Nepal's retail payment services, launched November 2021 as a core component of the National Payment Switch.
- NPI (National Payments Interface) â the consolidated API layer built on top of RPS, providing access to payment services including NEPALPAY QR, connectIPS, and â as of June 2026 â a live cross-border link to India's UPI.
RTGS â high-value settlement, hosted centrally by NRB
Nepal's RTGS system supports the processing of high-value and urgent transactions between participating banks and financial institutions (BFIs), and also provides settlement for other, systemically important payment systems on a net settlement basis. It's implemented and hosted centrally by Nepal Rastra Bank itself, rather than by NCHL or another intermediary â a structural difference from markets where the central bank outsources RTGS operation to an industry body.
- Settlement type: Real-time gross settlement (RTGS) â individual, immediate; also settles net obligations from other systems
- Speed: Immediate, though cheques of NPR 300 million and above are still cleared manually through Nepal Rastra Bank rather than through RTGS directly
- Value tier: High-value and urgent â RTGS processes four transaction types: customer transfers, transactions from BFIs, NCHL payments, and NRB payments
- What it's used for: Large interbank and customer transfers, and providing final settlement for Nepal's retail payment ecosystem
Banks connect to RTGS via connectRTGS, a gateway NCHL built and rolled out to commercial banks first, with development banks and finance companies following once granted RTGS access by NRB â meaning RTGS access itself has been a phased rollout across Nepal's financial institution tiers.
RPS â the real-time engine behind Nepal's retail payments
The Retail Payment Switch, launched in November 2021 as part of the National Payment Switch, is Nepal's shared national infrastructure for interoperable, account-based retail payments across banks, financial institutions, payment service providers, and government entities. It's the single transaction processing engine underneath a wide range of interoperable services: real-time account-to-account transfers, NEPALPAY QR payments, mobile banking and digital wallet payments via NPI, online merchant payments, utility/bill payments through the Biller Gateway, and Request-to-Pay services.
- Settlement type: Real-time to the end user; final settlement between banks occurs via RTGS on a deferred basis, backed by a Settlement Guarantee Fund to manage the interim settlement risk
- Speed: Instant for the transaction itself; interbank settlement finality follows via RTGS afterward
- Value tier: General-purpose retail and business payments â no single value threshold segments RPS traffic the way some other markets split real-time rails by size
- What it's used for: Account-to-account transfers, NEPALPAY QR merchant payments, mobile/digital wallet transactions, bill payments, request-to-pay
By recent measure, Nepal's retail payment volume through RPS crossed NPR 1.2 trillion monthly â a substantial figure for a system that only launched in 2021.
NPI and the new India cross-border link
The National Payments Interface is the consolidated API layer NCHL built on top of RPS, giving a single integration point for the underlying payment systems and overlay services â including NEPALPAY Instant (Virtual Payment Address-based transfers). In June 2026, NCHL and India's NPCI International Payments Limited (NIPL) launched a direct, real-time linkage between NPI and India's UPI, enabling person-to-person cross-border remittances using mobile numbers, VPAs, or UPI IDs rather than full bank account details â live initially through a select group of banks in both countries, with wider rollout planned.
Cross-border transactions specifically route through NPIx, an extension of NPI built for cross-border validations, conversions, and business workflows, before being processed through NPI domestically or handed to the relevant international payment partner network. Domestic settlement of the Nepal-side leg of any cross-border transaction still flows through RPS, with final settlement of the member banks occurring in RTGS â meaning the cross-border experience is fast for the end user, but structurally reuses the same domestic settlement chain described above.
Comparison at a glance
| System | Operator | Settlement | Speed | Value tier | Typical use |
|---|
| RTGS | Nepal Rastra Bank | Real-time gross settlement | Immediate | High value, urgent | Large interbank/customer transfers, retail-system final settlement |
| RPS | NCHL (NRB-mandated) | Real-time to user; deferred interbank via RTGS | Instant to user | General-purpose retail | Account transfers, NEPALPAY QR, mobile/wallet payments, bill pay |
| NPI / NPIx | NCHL | Routes through RPS/RTGS domestically | Instant (domestic and cross-border P2P) | General-purpose, cross-border P2P | Consolidated API access, India-Nepal UPI-linked remittances |
What this means if you're moving money in and out of Nepal
For most commercial activity â collecting from Nepali customers, paying local suppliers â RPS and its NPI-based overlay services are the practical rails, offering genuine real-time settlement to the end user even though the underlying interbank finality is deferred to RTGS behind the scenes. RTGS itself remains the layer for large or urgent transfers and as the ultimate settlement backbone.
The June 2026 UPI-NPI linkage is the most significant recent development for anyone with India-Nepal remittance or trade exposure â it's a first-of-its-kind direct connection between the two countries' fast-payment systems, and NCHL has explicitly framed it as a template for similar cross-border linkages elsewhere in the region.
