eSewa vs Khalti vs Fonepay vs ConnectIPS: which should your business accept?: Pasalos

If you are setting up an online business in Nepal, choosing how to collect digital payments is one of your most important decisions.

A few years ago, Cash on Delivery (COD) was the only payment method Nepali customers trusted. Today, mobile wallets and bank QR codes drive a large and growing share of transactions.

But you cannot simply install a single gateway and cover the whole market. Nepal’s digital payment market is fragmented among several major players: eSewa, Khalti, Fonepay, and connectIPS.

This guide compares these options on merchant fees, customer reach, settlement speed, and setup difficulty so you can build the right payment mix for your store.

1. eSewa: The market leader by volume

As Nepal's first and largest digital wallet, eSewa has over 10 million registered users worldwide. It is the default wallet for the majority of Nepali consumers.

Customer Base: Broadest reach in Nepal. Nearly everyone who pays online has an eSewa account.
Merchant Commission: Typically 1.5% to 2% per transaction, depending on volume.
Settlement Time: Generally T+1 (funds arrive in your business bank account the next business day).
Setup Effort: Medium. Requires a registered business, PAN, business bank account, and physical or digital agreement signing.

Verdict: Mandatory. You cannot run a competitive online store in Nepal without accepting eSewa.

2. Khalti: Popular among younger, urban audiences

Khalti is a fast-growing wallet known for its clean user interface, aggressive promotions, and strong adoption among younger demographics in Kathmandu and other major cities. In 2025, Khalti merged with IME Pay to operate as Khalti by IME, combining both user bases under one wallet.

Customer Base: Tech-savvy, younger buyers and urban professionals, now combined with IME Pay's user base post-merger (7M+ users).
Merchant Commission: Typically 1.5% to 2% per transaction.
Settlement Time: T+1 (next business day).
Setup Effort: Medium. Requires standard registration documents (PAN, business registration, bank account).

Verdict: Add Khalti when your customers already use it. Its API supports direct checkout integration. See our step-by-step guide to accepting Khalti payments for merchant account requirements and setup.

3. Fonepay: The QR code giant for direct bank payments

Fonepay is not a wallet; it is a payment network owned by F1Soft that connects nearly all mobile banking apps in Nepal. When a customer pays via Fonepay, they scan a QR code inside their own bank's app (e.g., Nabil, Global IME, NIC Asia), and the money moves directly from their bank account to yours.

Customer Base: Anyone with a Nepali bank account and a mobile banking app (over 20 million registered customers across its bank network).
Merchant Commission: Often lower than wallets, sometimes flat rates or under 1.5% depending on the merchant tier and bank partner.
Settlement Time: Instant or T+0 (funds are credited directly to your bank account immediately in most setups).
Setup Effort: Harder to set up directly as a website API gateway, though easy to set up as a physical counter QR stand.

Verdict: Essential for high-value orders where wallet balance limits are too restrictive.

4. connectIPS: Best for large bank-to-bank transfers

connectIPS is operated by the Nepal Clearing House (NCHL). It allows customers to link their bank accounts directly and perform high-value transfers at extremely low costs.

Customer Base: Established banking customers making larger purchases.
Merchant Commission: Flat fees per transaction (e.g., रु 2 to रु 8 per transaction, rather than a percentage), making it highly cost-effective for high-ticket items.
Settlement Time: T+0 or T+1 depending on the clearing cycle.
Setup Effort: High. Requires bank verification and direct integration with NCHL systems.

Verdict: Best if you are selling high-priced goods (like electronics, furniture, or high-end jewelry) where a 2% percentage fee would cost you thousands of rupees.

Comparison Table for Merchants

Provider	Type	Reach	Standard Merchant Fee	Settlement Time	Best For
eSewa	Wallet	10M+ Users	1.5% - 2.0%	T+1 (Next Day)	General consumers
Khalti (by IME)	Wallet	7M+ Users	1.5% - 2.0%	T+1 (Next Day)	Young & urban buyers
Fonepay	Bank Network	20M+ Users	1.0% - 1.5%	Instant (T+0)	Direct bank payers
connectIPS	Bank Clearing	Bank holders	Flat रु 2 - रु 8	Fast / T+1	High-ticket items

User counts checked July 2026 against each provider's own published figures (eSewa's 17th-anniversary announcement, Khalti by IME's site, Fonepay's about page); fee/settlement figures are unchanged from standard published merchant terms. Contact provider merchant sales teams for custom volume-based rates.

Which options should your business accept?

You should not choose just one. Because wallet and bank loyalty in Nepal is highly fragmented, offering only one payment gateway will cause you to lose customers at checkout.

A customer who wants to pay with eSewa might abandon their cart if they only see a Khalti logo, and vice versa.

The Recommended Setup

An online checkout for Nepal should include:

eSewa + Khalti: To capture the vast majority of wallet users. (New to merchant accounts? Start with our step-by-step guide to accepting eSewa payments.)
Fonepay QR / Mobile Banking: To let bank account holders pay directly without transferring money to a wallet first.
Cash on Delivery (COD): As a fallback for customers who are still building trust with your brand.

How to set this up without four separate integrations

Integrating four separate payment APIs requires weeks of custom coding, multiple merchant accounts, and constant software maintenance.

On Pasalos, the storefront displays eSewa, Khalti, Fonepay QR, connectIPS, and Cash on Delivery as checkout options. Add your merchant credentials in the dashboard, and Pasalos handles checkout redirects and webhook confirmations.