Have you ever wondered whether mobile banking is worth it? I have. My doubts started a few months ago, when I kept getting login errors in NIC ASIA’s mobile banking app.
A bit of history: Kumari Bank (opens in a new tab) was the first bank in Nepal to offer internet banking, in 2002, and Laxmi Bank was the first to offer SMS banking, in 2004.
Mobile banking keeps getting more popular, and more people sign up to their bank’s app every day.
Today every bank in Nepal has its own mobile banking app. Most offer similar features, and a few have extras.
Here’s NRB’s data on how the number of mobile banking customers has grown:
| Particulars | Poush 2078 (mid-Jan 2022) | Mangsir 2079 (mid-Dec 2022) | Poush 2079 (mid-Jan 2023) |
|---|---|---|---|
| Mobile Banking Customers | 16,212,468 | 19,766,415 | 20,053,420 |
That’s growth of about 21.9% from mid-January 2022 to mid-December 2022, and about 23.7% to mid-January 2023.
Advantages of mobile banking#
- Access: mobile banking is easy to start. You can activate it from your phone (a few banks ask you to visit a branch), and then make transfers to any bank in a few taps.
- Convenience: no more queues or banking hours. You can check your balance, see your transactions and transfer money without visiting the bank.
- Security: banks protect their apps with encryption, a password and an M-PIN for every transaction.
Disadvantages of mobile banking#
- Technical skills: not everyone is comfortable with apps, and older people in particular often find online transactions hard.
- Fees: this is the main reason I wrote this article. There are fees for almost everything: to join, every year, and again if you forget your password (the one that frustrates me most).
- Scams: heard of the WhatsApp lottery or OTP scams? People lose money to scams like these, mostly older people and those who haven’t heard of them, and there’s news of new cases every day.
Mobile banking charges at a few banks (2023)#
| Bank | Registration Fee | Annual Maintenance Fee | PIN regeneration or password re-issue |
|---|---|---|---|
| NIC ASIA Bank | NPR 500 | NPR 300 | NPR 100 per request |
| NMB Bank | NPR 200 | NPR 200 | NPR 100 |
| Prabhu Bank | NPR 300 | NPR 300 | Not listed |
| Siddhartha Bank | NPR 300 | NPR 300 | NPR 50 |
So, is it worth it or not?#
It depends. This blog is about earning and saving money, so my answer is no: it isn’t worth paying registration fees, annual fees and PIN re-issue fees.
Rs 300 a year isn’t much, but saving money beats spending it. Someone will argue that you get a lot of features in return.
Most people have accounts at more than one bank. If the average yearly charge is Rs 300 and you use mobile banking at three banks, you pay Rs 900 a year, and I doubt you earn that much in interest from all three combined.
In mid-January 2023 there were 20,053,420 mobile banking customers. If each paid around Rs 300 a year, banks would collect about Rs 601 crore a year from mobile banking fees alone. Not everyone pays the full fee, so treat that as a rough upper limit, but it’s still a big number.
So what’s the alternative to this?#
There is an alternative, and it isn’t switching between wallets. It’s connectIPS (opens in a new tab). Many of you probably use it already.
What is connectIPS?#
connectIPS is a payment system built by Nepal Clearing House Ltd. (NCHL), a public limited company that works under the guidance of Nepal Rastra Bank (opens in a new tab). connectIPS is one of NCHL’s products.
Why connectIPS?#
Here’s why I use it:
- No joining fee: unlike mobile banking, connectIPS doesn’t charge you to sign up.
- Several banks in one place: you can link accounts from commercial banks, development banks and finance companies, about 50 institutions in all.
- Balance and history: you can check your balance and recent transactions.
- Security: you choose the transfer amount above which an OTP is required, and it asks you to change your password and M-PIN regularly.
- Cheaper transfers: sending money to any bank account costs Rs 2–8, depending on the amount. See connectIPS charges (opens in a new tab).
- Wallet top-ups: you can load 14 wallets, including Khalti and IME Pay.
- Your own accounts: moving money between your own accounts is easy.
- Higher limits: up to Rs 20 lakh per transfer on the web and Rs 2 lakh in the mobile app. I believe most banks’ apps allow around Rs 2 lakh.
That’s all from me. As the saying goes, “Samajhdar ko ishara hi kaafi”.