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Nepal Bans Use of Chinese Digital Wallets Over Forex Concerns

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Smartphone payments - Sputnik International
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WeChat Pay and Alipay are immensely popular digital payment applications in China and are used by a majority of Chinese tourists travelling abroad.

New Delhi (Sputnik): The central bank of Nepal has banned using Chinese digital wallets — WeChat Pay and Alipay in the country, saying the Himalayan kingdom is incurring foreign income losses due to the illegal use of those payment applications by Chinese tourists in Nepal.

Both WeChat Pay and Alipay happen to be immensely popular mobile payment applications in China.

READ MORE: As China Woos Nepal, India Opens Waterway For Its Landlocked Neighbour

Nepal Rastra Bank (NRB), the central bank of Nepal, said both of these digital wallets are carried by most Chinese nationals visiting the Himalayan nation.

These payment applications are also used by Chinese nationals who operate hotels, restaurants and other businesses in the country. Thus, when Chinese visitors engage with businesses operated by Chinese nationals in Nepal, the payments are mostly done using these two Chinese digital wallets.

Kathmandu, Nepal. File photo - Sputnik International
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It leads to payments for services acquired in Nepal to be made in China, as the Chinese payment applications are not registered in Nepal.

The non-registration of these digital wallets has prevented Nepalese authorities from registering expenditure made by Chinese tourists as a foreign income. It is so because the money technically never enters Nepal's banking channel, allowing the Chinese businesses to send their earnings back home without having to pay any taxes.

The domestic authorities in such situations would have no evidence to substantiate that those transactions were made in Nepal.

READ MORE: Nepal Dismisses Indian Army's Claims of Discovering YETI Footprints

"These activities are illegal. That's why we have banned the use of those applications in Nepal", NRB spokesperson Laxmi Prapanna Niroula told the Nepalese daily The Himalayan Times. "If people are found using Chinese payment applications, criminal investigation will be launched against them".

Nepal received 153,602 Chinese tourists in 2018, an increase of 46.8 percent as compared to 2017. Nepal is also planning to attract even more Chinese tourists in the "Visit Nepal Year 2020", a government campaign that aims to attract two million foreign tourists, the newspaper reported.

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