A Study on the effectiveness of Payment Service Providers with its future prospects: A case Study among the users in Kathmandu Valley

Abstract

The rapid growth of technology has empowered almost all sectors. ICT has revolutionized the entire finance sector with the introduction of digital payment system which has enabled us to perform transaction without using cash. The research motivation is to study various factors affecting the Payment System Providers’ (PSPs) effectiveness among the users in Kathmandu Valley (consisting three (3) districts: Kathmandu, Lalitpur and Bhaktapur), Nepal and identifying its future prospects. This study also reveals the challenges to PSPs in Nepal with entrance of PSOs with Open Innovation such as Unified Payment System (UPI). The research was conducted with the response of 405 respondents within Kathmandu Valley with the research instrument as quantitative approach of questionnaire survey. The result of the data analysis revealed that almost 90% of the respondent have used the digital payment systems every day or once a week or once a month, with above 83% of them have used digital payment system 1-2 years or above two years which shows status of adoption of PSPs in Nepal. Furthermore, the role of regulatory body plays a vital role in the future of digital payment sector. In such scenario, analyzing various factors affecting the effectiveness of PSPs helps in the development and innovation of PSPs.