Electronic payment service providers have begun to transform into public companies to issue 20 percent shares. The Nepal Rastra Bank (NRB) has introduced the rule that electronic payment companies have to go to public companies and issue primary shares to the public.
Electronic payment service provider eSewa Phone Pay Pvt. Ltd. is also preparing to go public. We will go public first, only then we are preparing to issue shares, said Subash Sapkota, chief executive officer of sSewa.
“It will take time to go public in a while,” he said. “Only then will we issue shares to the public.”
NRB has asked electronic payment service providers to issue IPOs to private companies to public companies. Accordingly, private companies are being transformed into public companies.
IME Digital Solutions Private Company, an electronic payment service provider of IME Group i.e. Chandra Dhakal Group, has been converted to public. IME Pay is preparing to issue a 20 percent stake in the electronic payment service provider to the public.
Similarly, shares of Connect IPS operated by Nepal Clearing House Limited are also being prepared to be issued to the public. The company has been transformed into a public company.
In addition, Namaste Pay electronic payment service provider Nepal Digital Company Limited, which was recently approved by Nepal Rastra Bank, has to issue 20 percent shares.
After the Nepal Rastra Bank made arrangements for the electronic payment service provider company to go to a public company to issue shares, many private companies have started converting to public. Bhuvan Kandel, executive director of Nepal Rastra Bank and head of the payment system department, said that the electronic payment service provider company has been transformed into a public company as per the unified directive brought by the central bank.
“Some electronic payment service providers seem willing to issue shares,” he said, “but so far no one has been approved to issue shares.”
A few months ago, Nepal Rastra Bank (NRB) had brought a provision that these companies should issue 20 percent ordinary shares in three years through the Payment and Debt Regulation, 2077 BS.
“At least 20 percent of the shares must be issued to the public within three years from the date of commencement of the service by the institution registered as a public company and licensed to operate payment services from the bank,” the regulation said.
So far, 38 electronic payment companies have obtained licenses, said NRB Executive Director Kandel. He informed that 28 of them have obtained licenses as mobile wallets and 10 as payment system operators.
NRB has stopped accepting applications for licenses. However, the central bank has been giving permission to those in the pipeline to get permission.
NRB says that there will be 65 to 70 payment service providers including those in the pipeline to get licenses.
According to NRB, the payment service providers include IME Pay, eSewa, CellPay, CG Pay, Khalti, Mo.Ru, Q Pay, Pay Time, Smart Card, Mohar Pay Card, Prabhu Pay, E-Net Pay, Moko, KurakaniPay, Mobile Money Pay and so on.
As electronic payment service providers (mobile wallets) are ‘financial transaction’ companies, NRB has introduced a policy of going to public limited companies to earn the trust of consumers. Entrepreneurs have taken it ‘positively’.
The businessman says that he has to go to a public company to win the trust of the customers as he is a company that does ‘financial transactions’.
The regulations brought by NRB stipulate that if there is a public limited company, IPO should be issued within three years.
Entrepreneurs say that it is not easy to issue an IPO by going to a public company.
In order to go for IPO, it has been made mandatory to make the company’s business big and make profit.
The public company should have made a profit in 3 years. And only IPOs can be issued.
Loss-making companies will not be allowed to issue IPOs.