13th October 2025, Kathmandu
The digital landscape in Nepal is undergoing a critical transformation as the central regulatory body, Nepal Rastra Bank (NRB), intensifies its efforts to ensure a robust, compliant, and healthy financial ecosystem.
NRB Revokes FirstPay’s License
In a decisive move that underscores this commitment to regulatory integrity, the NRB has officially revoked the operating license of FirstPay Technology Pvt. Ltd. The cancellation of the company’s Payment System Operator (PSO) license, which was originally granted on Falgun 13, 2076 BS, is a significant event that highlights the central bank’s zero-tolerance policy towards non-compliance in the fast-paced world of digital transactions.
The Core Reason: Violation of Regulatory Provisions
The foundation of the NRB’s action against FirstPay Technology rests firmly on the legal framework governing payment services in the nation. The central bank clarified that the revocation was enacted under Section 13(6) of the Payment and Settlement Act, 2075. This specific section of the Act grants the Nepal Rastra Bank the necessary authority to withdraw a company’s operating permission should it fail to adhere to the mandated regulatory provisions.
While the specific, detailed nature of FirstPay Technology’s non-compliance has not been extensively disclosed in the initial public notice, the action itself is a clear indicator that the central bank is rigorously monitoring the operations of all licensed entities. In a highly competitive digital payment space, which has seen the proliferation of e-wallets and payment systems since NRB began issuing licenses in 2072 BS, the demand for strict adherence to rules regarding capital requirements, operational standards, consumer protection, and especially the crucial aspects of the Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) framework is paramount.
Broader Context of Regulatory Scrutiny
The revocation of FirstPay Technology’s license is not an isolated incident. It is part of a larger trend where the central bank is actively moving to clean up the payment sector. Reports indicate that the NRB has revoked the licenses of several other payment service and system providers due to various issues, including lack of sufficient business, inability to build a substantial user base, intense market competition, and the failure to present a viable, long-term business model. This consolidation wave demonstrates NRB’s intent to prune the market of inactive or non-performing players, thereby strengthening the stability and trustworthiness of the remaining licensed institutions. The move sends a clear message that holding a license comes with a non-negotiable obligation to operate responsibly and in full compliance with the central bank’s directives and the mandates of the Payment and Settlement Act.
Understanding the Legal Mandate: Section 13(6)
The Payment and Settlement Act, 2075 is the key piece of legislation that provides the Nepal Rastra Bank with its supervisory and regulatory powers over the payment sector. Within this Act, Section 13 is dedicated to the conditions under which a license may be subject to non-renewal or cancellation.
Section 13(6) specifically outlines the central bank’s power to take punitive action against a payment system operator or service provider that violates the terms of its license or fails to comply with the overarching directives and regulations set forth by the NRB. For FirstPay Technology, the revocation under this section confirms that the central bank found a material breach or consistent non-adherence to the operational guidelines and legal mandates that govern Payment System Operators (PSOs). PSOs are entities that provide the infrastructure—like switching networks or shared payment platforms—that make transactions possible, and therefore their operational integrity is deemed critical to national financial stability.
The parallel action of non-renewal for other payment institutions, often cited under Section 13(4) for reasons like failure to meet renewal conditions, further illustrates the central bank’s multi-pronged approach to regulatory enforcement. For the PSO license of FirstPay Technology to be actively revoked under Section 13(6), it suggests a more serious issue of compliance failure or operational deficit than a simple missed renewal deadline.
Implications for Consumers and Stakeholders
Following the revocation, the Nepal Rastra Bank has included a vital instruction in its public notice. It has requested that all institutions or individuals with outstanding transactions or dues related to FirstPay Technology should contact the concerned parties within 30 days of the notice’s publication for settlement.
Key Takeaways for the Market:
Risk Management: This event serves as a crucial reminder to consumers and businesses alike about the importance of using licensed and financially sound digital payment providers. While the NRB aims to protect consumers, the ultimate responsibility for transaction settlement lies with the concerned parties.
Industry Consolidation: The market is expected to become more competitive and robust as weaker, non-compliant, or poorly managed entities are removed. This will likely benefit the remaining 30+ licensed e-wallet and payment service providers, encouraging them to invest more heavily in diversified, user-centric, and fully compliant services.
Strengthened Oversight: The NRB’s consistent use of its powers, including the issuance of new guidelines on targeted financial sanctions and the enforcement of stricter monitoring, signals a permanent shift toward a highly regulated digital payment environment. This regulatory discipline is essential for securing the stability of Nepal’s burgeoning digital economy, which sees billions of rupees transacted monthly through various wallet and payment channels.
In conclusion, the revocation of FirstPay Technology’s license is a powerful demonstration of the Nepal Rastra Bank’s commitment to creating a safe, efficient, and reliable payment system. It is a necessary step in the evolution of Nepal’s digital finance sector, pushing all participants towards higher standards of governance and compliance.
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