The story of eSewa, the company synonymous with digital wallets in Nepal
eSewa, Nepal’s first digital wallet is now 13 years old. The application which was released in beta version in 2009 launched its full-fledged service after some time on January 25, 2010. Since then, it has contributed significantly to building a cashless economy during this period.
Today, eSewa is considered the number one e-wallet such that it has become synonymous with digital wallet service in Nepal. Let’s take a brief tour of Nepal’s first online payment escapade.
The beginnings were not easy, recalls Subash Sapkota, CEO of the company. “We had a hard time explaining the digital wallet to people. The digital transaction was then the need of the hour. However, there was no proper channel to do so.
But now, the number of eSewa account holders has reached around six million.
The app made it easy to pay all kinds of utility bills, including electricity bills, insurance premiums, phone, drinking water and internet bills, charge cards, plane and bus tickets, school and university fees, etc.
Before the introduction of eSewa wallet, there were no other digital wallets in Nepal. Now the number of digital wallets has reached 27.
But, as a pioneer of digital payment gateway in Nepal, he had to settle for cash-only transactions in the start-up phase. “We haven’t completely conquered it,” says Sapkota, which still sees cash transactions as its main competitor.
Sapkota says they see other similar companies as companions rather than competitors. “Together, the main competition should be with money now,” he says.
In 13 years, many people have joined the world of digital wallets. Whether it’s going to lunch or getting a plane ticket, the payment behavior of many cash users has changed.
But, eSewa has struggled a lot to establish itself in the market. Even after it went live, the necessary infrastructure for digital transactions was lacking in the country. “We were talking about mobile payments, but there weren’t enough mobile phones at that time, and internet access wasn’t available everywhere.”
It was only after about five years of the company’s founding that mobile phones came into the hands of many people. Likewise, the growth of internet service providers has begun to accelerate. All these technical developments have opened a door for the success of digital transactions in Nepal. With this, eSewa entered the second phase of its growth.
The market difficulties were not yet over as there was no digital transaction law in Nepal. However, eSewa was registered with the authority and operated based on international usage.
At that time there were many challenges as to who would regulate such a business, who would give out licenses, how people would trust, how the money kept there would be protected, whether the money there would be kept by the company or not.
Digital transactions after Covid-19
Amid such confusion, the Covid-19 pandemic began. Post-pandemic, public interest in digital transactions and payments has increased.
“The pandemic has highlighted the need for digital transactions, which has led to heightened public interest and increased use of the digital wallet,” Sapkota says.
Now, with Covid-19, many of the challenges the company faced in the past have been resolved. The government has enacted laws for digital transactions. The Nepal Rastra Bank has set up a separate department responsible for licensing digital transactions and regulating these institutions.
CEO Sapkota said, “With proper infrastructure and legislation, it was a bit easy for us, although we were established without infrastructure or legislation.”
But now there is a new challenge for businesses. It’s a security challenge.
Currently, the main concern is whether this eSewa will only work with digital payment. He made digital transactions. But now, apart from this, customers are also interested in the digital licensing process for financial transactions.