TRIBHUVAN UNIVERSITY
BHAKTAPUR MULTIPLE CAMPUS
DUDHPATI – 17, BHAKTAPUR
A REPORT
ON
KHALTI
Submitted By:
Sagun Karki
Subin Bogati
Shushant Banzara
Submitted To:
Serij Suwal
Department of IT
In partial fulfilment of the requirements for the Course E-Commerce
September 2018
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ACKNOWLEDGEMENT
We would like to express our gratitude to Bhaktapur Multiple Campus Dudhpati, Bhaktapur
for providing us this golden prospect to prepare the research report on ‘Khalti’. Our horizons
of knowledge have been expanded about the digital wallet in Nepal and its importance in
contemporary business world. Moreover we experience and enjoyed the difficulty in
conducting research, however we got opportunity to earn our language, knowledge and talent.
Our sincere thanks go to Mr. Serij Suwal sir from the Department of IT in BMC for guidance
and inspiration and resource materials without which we would not be able to prepare this
report. We are profoundly grateful to all the intellectuals’ colleagues who helped us
throughout the project.
Many attempts have been made to bring this report up to the standard so as to balance with
our text. Despite these efforts there may be shortcomings regarding this topic. Therefore we
highly anticipate for the suggestions and recommendations for further improvement of the
report. Those suggestions will be highly appreciated and acknowledged.
Research Team
Sixth semester.
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DECLARATION
This is to certify that we have completed the this project entitled “Khalti” under the guidance
of Mr. Serij Suwal in partial fulfillment of the requirements for the degree of Bachelor of
Business Administration at Faculty of Management, Tribhuvan University. This is my
original work and we have not submitted it earlier elsewhere.
Date:
Project Team
BBA program, 6th semester
Bhaktapur Multiple Campus
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RECOMMENDATION
This is to certify that Sagun Karki, Shushant Banzara and Subin Bogati completed this
dissertation work entitled “Report on; “Khalti” as a partial fulfillment of requirement for the
course E-commerce under our supervision. The report has been presented in the prescribed
format of department of IT. This report is forwarded for evaluation.
……………
Mr.Serij Suwal
Department of IT
Bhaktapur Multiple Campus
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EVALUATION SHEET
We have concluded the viva-voce examination of the report by (Sagun Karki, Shushant
Banzara and Subin Bogati) Khalti and found the report to be the original and according to the
prescribed format. We recommend the report to be accepted as partial fulfillment of the
requirements for E-commerce of BBA program.
……………………. ………………….
Internal evaluator External evaluator
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ABSTRACT
Khalti is an e-wallet which allows instant, secure and quick online payments in Nepal.
It is operated and owned by Sparrow Pay Pvt. Ltd under the parent company Janaki
Technology. Its office is situated in Hariharbhawan, Lalitpur.
Some of the major services provided by Khalti are: mobile balance topup, DTH and
ISP, airline ticketing and movie ticketing. The major objective of Khalti is to make
transactions in Nepal completely cash free. User friendliness and use of different
business models make this app however different from other e-payment systems in
the market. The major strategy focused by Khalti to reach maximum customers is to
sponsor lots of events.
The feeling of insecurity for online payments and unawareness about e-payment
systems serve as the major challenge for the digital wallet like Khalti. Substituting
electronic payment for cash is not so easy without the clear vision and strategies.
Likewise, rigid government policies for e-payment systems, problems of integrating
banks in e-payments, high investment on HR as well as promotion etc. serve as the
challenges for Khalti. On the contrary to that, cashless transaction in Nepal,
corruption free offices due to transparency and less burden for NRB come as the
advantages or opportunities for Khalti.
The banking partners of Khalti are Nepal Investment Bank Limited (NIBL) and
Machhapuchhre Bank Limited. Similarly, some of the service associates are: Dish
Home, UTL, Subisu, Nepal Telecom, Ncell, Simtv, Broadlink, Smart cell, Worldlink
and Sparrow.
Today, electronic payment systems are increasing in every sector where cash were
previously used or we can say is still in use such as banking, retail, on-line markets,
health care and even in government offices. Recently, Nepal Electricity Authority
(NEA) also facilitated customers to pay electricity bills online whereas Nepal
Telecom had already offered this service long time back. These recent developments
help us to recognize the market the digital wallet like Khalti can take in coming days.
Previously established digital wallet like eSewa can serve as major competitors
demanding new innovations from the respective developers. Technological
development and availability of internet has facilitated a globalized world and to
address the need of globalized market cashless transaction is must which is thus to
some extent fulfilled by e-payment system like Khalti.
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Contents
ACKNOWLEDGEMENT...........................................................................................................................2
DECLARATION........................................................................................................................................3
RECOMMENDATION..............................................................................................................................4
EVALUATION SHEET...............................................................................................................................5
ABSTRACT..............................................................................................................................................6
1. Background........................................................................................................................................8
2. Introduction to Khalti........................................................................................................................9
2.1 Objectives....................................................................................................................................9
2.2 How to use Khalti?......................................................................................................................9
2.3 How to transfer funds?.............................................................................................................10
3. Advantages of Khalti........................................................................................................................10
4.Integration........................................................................................................................................10
5. Services of Khalti..............................................................................................................................12
6. Business Model................................................................................................................................14
7.Marketing Strategies........................................................................................................................14
8. Segment Target Positioning of Khalti...............................................................................................15
9. Working Process..............................................................................................................................15
10. Payment Method...........................................................................................................................17
11. SWOT Analysis...............................................................................................................................18
Business Problem Analysis and Solution..............................................................................................19
A. Problem Analysis........................................................................................................................19
B. Solutions.....................................................................................................................................20
Conclusion and Recommendations.....................................................................................................22
Sources of Data....................................................................................................................................23
Limitations of the Study.......................................................................................................................23
Bibliography.........................................................................................................................................24
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1. Background
According to the latest Management Information System (MIS) Report of Nepal
Telecommunications Authority (NTA) published on June 2016, the mobile service
penetration rate has hit 105.15 per cent of the population i.e. the number of mobile
subscriptions has outnumbered Nepal’s population. As of February 2016, the number
of mobile subscriptions in Nepal stands at 27.85 million, against the total population
of 26.49 million. So, reach of smartphones facilitate for online shopping and e-
payments if internet service is made accessible everywhere.
Electronic payment systems are increasing in every sectors where cash were
previously used or we can say is still in use such as banking, retail, on-line markets,
health care and even in government offices. So, digital wallets and e-payment systems
like Khalti can address the need of this advanced generation, which shows it has
better potential market in future. People hesitate for online payments due to security
concerns and if this major issue is addressed tactfully by Khalti, it will obviously
capture the huge market.
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2. Introduction to Khalti
Electronic payment systems are increasing in numbers due to wide spread internet
based banking and shopping. Khalti is also one of the electronic payment system
recently introduced in Nepal. Khalti is a digital wallet for instant, secure and hassle-
free online payments in Nepal. Khalti is operated and owned by Sparrow Pay Pvt.
Ltd. The parent company is Janaki Technology which has been in the software
product industry since 2010. Its office is situated in Hariharbhawan, Lalitpur.
Khalti is a digital payment service that provides cashless transactions for various bill
payments, mobile recharges, DTH payments, money transfers, domestic remittance,
shopping and wallet payments. Khalti also provides various offers & cash backs on
various service payments.
2.1 Objectives
The major goal of Khalti is to simplify lives of people by bringing financial
inclusivity to every individual in Nepal and take the payment industry from offline to
online through best practices. Further as other electronic payment systems, the major
objectives of Khalti are as follows:
• To make transactions in Nepal cash free
• To serve the customers with more online facilities
• To be as user friendly as possible
2.2 How to use Khalti?
To use Khalti, three simple steps suffice.
Step 1: Create an account
Create Khalti account via Khalti website (https://khalti.com/#/service/) or Khalti app
available in Google Play Store.
Step 2: Load fund
Load the funds into wallet through e-banking or by requesting funds from Khalti
friends.
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Step 3: Make payments
Finally make payments to desired services while enjoying different offers provided by
Khalti.
2.3 How to transfer funds?
Khalti fund transfer includes following systems to make customers payment more
convenient:
• Bank to Wallet: It facilitates loading funds into Khalti via e-banking service
from partner banks.
• Wallet to Wallet: It facilitates sending or requesting funds to or from your
Khalti friends respectively.
• Wallet to Bank: It facilitates transferring Khalti funds into user’s bank
account.
3. Advantages of Khalti
Khalti aims to facilitate transactions by making cashless transaction system. It has
done collaboration with different organizations to provide such services. The services
of Khalti provides following advantages.
• Wide range of services
• Anytime service
• Easy transaction system
• Real-time data monitoring
• Integration of services
• Account management via device in hand
4.Integration
Khalti has integrated its system with some of the banks, financial institutions,
government agencies and private firms that are normally termed as merchants.
Partnering up is a normal process with complex mechanisms. The codes that make up
the system and interface of Khalti is integrated with that of the merchants and the
Khalti system comes to action.
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▪ Banking Partners
The banking partners of Khalti are:
• Nepal Investment Bank Limited (NIBL)
• Machhapuchhre Bank Limited.
▪ Service Associates
Khalti has been providing services by collaborating with following service
associates.
▪
DishHome
• UTL
• Subisu
• Nepal Telecom
• Ncell
• Sim TV
• BroadLink
• Smart Cell
• WorldLink
• Sparrow
• Midas Education
These are the partners Khalti is currently associated with and Khalti is testing its
system with cinemas as well but they have not gone live.
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5. Services of Khalti
Khalti provides wide range of services to the customers. The attractive and useful
services provided by Khalti are as follows.
• Mobile Top-up
Khalti provides easy option for mobile phone users to top-up their device anytime
and anywhere by just using Khalti service. This service is available to Nepal
Telecom and NCell users. Users just need to enter mobile number to be topped-
up. For NT users, top-up amount needs to be selected from the provided list: Rs.
10, 20, 30, 40, 50, 100, 200, 300, 500, 1000, 1500, 2000, 2500, 3000, 4000, 5000.
However, for NCell users, they can enter whatever amount they require.
• Recharge Service
A bit different from top-up service, recharge service provides users with recharge
pin with much ease for respective services. Users simply need to select the service
and the amount. Khalti provides following recharge services:
▪ NT Recharge
▪ UTL Recharge
▪ Smart Cell Recharge
▪ Broadlink ERC
▪ DishHome ERC
• Landline Payment
Users can now pay their landline bills from the couch of their living room. They
do not need to stand on tiring queue just to pay for service they enjoy. By using
this service of Khalti, Nepal Telecom landline users can enter their landline
number and select the payment amount, and easily pay their landline bill.
• DTH Payment
Khalti allows users to pay their DTH bill anytime and anywhere. All they need to
do is enter their account ID and select the payment amount. Currently, DishHome
and Sim TV subscribers can enjoy this facility. For Sim TV subscribers, they can
enter their customer ID and the amount (between Rs. 50 and Rs. 50,000) to
recharge their digital TV anytime and anywhere.
• Internet Payment
This service of Khalti facilitates customers of largest Internet Service Providers
(ISPs) of Nepal like Subisu and WorldLink to pay their Internet bill from
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anywhere at any time. By entering customer ID, mobile number, and payment
amount, they can get it all done with no time or location inconveniency. Similarly,
ADSL customers also can pay their Internet bill in few easy steps. All they need
to do is to select service plan, either unlimited or volume-based, enter their
landline number, and select the payment amount.
• Airline Ticketing
Khalti also provides flight booking features for domestic arena. By providing
simple information, users can search for domestic flights of their need and
preference for all around Nepal. Currently, Khalti has made collaboration with
following airlines.
▪ Buddha Air
▪ Yeti Airlines
▪ Tara Airlines
▪ Saurya Airlines
▪ Simrik Airlines
• Midas Subscription
Khalti also allows subscription to Midas E-Class services with few simple steps.
Users can select required class and package, and get subscription accordingly.
• Electricity Bill Payment
Paying electricity bill by standing in queue in front of billing counter has been
tiresome process since years. Khalti now allows customers to pay their electricity
bill to Nepal Electricity Authority (NEA) anytime from anywhere.
Similarly, Khalti also offers other attractive features like:
• Different bonus schemes for different transactions
• Multiple fund transfer options, i.e. from bank to wallet, wallet to wallet,
wallet to bank
• Attractive product offers (with attractive Khalti bonus)
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6. Business Model
Khalti adopts following business models:
• Business-to-Business (B2B)
Khalti deals with other corporate houses or merchants to make transactions.
To provide services to Khalti users, Khalti exchanges services with such
corporate houses or merchants. For example, Khalti transfers Nepal Telecom
(NT) to provide recharge information of NT users. Along with such
information, significant amount of fund is also transferred between Khalti and
NT.
• Business-to-Customer (B2C)
Khalti facilitates its users by providing different services such as bill payments
and mobile top-up. These services aim to make tedious jobs easy for its
customer. User-friendly interface and service simplicity makes Khalti
customer-centric.
• Customer-to-Customer (C2C)
Using Khalti service, customers can make transactions among themselves.
Khalti provides platform for its users to request and offer funds among
themselves. Considering this feature, Khalti can be said to being adopting C2C
business model too.
7.Marketing Strategies
A marketing strategy is basically something that guides a business by answering
questions such as what to say, whom to say so that the sales of the company can be
increased. It is a marketing plan devised by the company to boost company sales. To
compete with the competitors and gain competitive advantage over them, proper
marketing strategies need to be adopted. The same is for Khalti who has competitors
like eSewa, iPay, MoCo, and PayWay.
Looking at the present demography of Khalti, there are over 10,000 app downloads
which is not a bad number for an infant company and since most of its services are
based on smartphones, it is user-friendly. But again, Khalti has devised the following
marketing activities.
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a. Content Marketing
Khalti has been using the means of internet to provide its users and potential
users with articles, blogs, photos and videos through different network sites and
through the use of paid promotion.
b. Social Media
Social media is an important platform for businesses like Khalti to let people
know about the services. Thus, like any other businesses, it has been using
Facebook promotional tools and ads on YouTube to promote the product.
c. Public relations
Khalti sponsors and even organizes different events which are youth targeted.
Recently, it had teamed up with One plus, which is a smartphone brand where it
provided cash-backs upto 4,000 rupees, which has helped the company to retain
as well as acquire new customers.
8. Segment Target Positioning of Khalti
The STP (segment, targeting, and positioning) strategy of Khalti is as follows.
Segment People with smartphones looking for
cashless payment transactions
Target Group Urban tier1, tier2 cities’ young and
middle-aged people
Positioning Khalti can be used as an alternate for cash
to make payments for daily basic needs
9. Working Process
A user having a Khalti account can perform almost all kinds of online fund transfer
and payment activities. All the private and confidential information are encrypted in
a secured way before transmission of information among business associates.
As for customers, in three simple steps, a person can have Khalti account and can
start the transactions.
Step1: Download the app and create account
The user desiring to operate Khalti should have an application software first, he/she
can have the software through Play Store in Android phones and App Store in Apple
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devices. After the download is completed, using very simple steps which require
customer information, user can open an account.
Step2: Load funds
After downloading the application and creating account on the device, the user can
load funds through e-banking. Khalti is associated with NIBL and Machhapuchhre
bank, so the user can deposit certain amount in the bank and the users’ account will be
loaded with the exact amount deposited in the first place.
Step:3 Start using
The account is now fully functional and the user can use the app anyway he wants.
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After setting up the account, user performs transactions. A fund transfer model has
been shown in the following diagram.
User 1 User 2
Transfers fund to Receives fund from
User 2 User 1
Fund
Bank Wallet transfer Wallet Bank
account of record of record of account of
User 1 Fund User 1 User 2 User 2
debited Fund
credited
Electronic wallet system
Fig. E-wallet fund transfer model
10. Payment Method
Payment in Khalti is done through the wallet in the app. To have a wallet, a user must
have a Khalti account where he/she can load funds through banks using deposit
vouchers.
Unlike other digital wallets, Khalti is easy to operate. Through the use of bank deposit
vouchers that are deposited in either NIBL or Machhapuchchhre Bank, a user can
load fund to his/her account and perform the transactions. User also can transfer funds
from one wallet to another, bank account to wallet, and from wallet to bank account.
Once the user pays certain amount for the service he/she is using, the balance is
deducted from the wallet and once the wallet is empty, the cycle of loading the finds
repeat.
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11. SWOT Analysis
Every company has some variables determining its strengths and weakness, and the
market brings opportunities and threats. The strengths, weaknesses, opportunities, and
threats for Khalti are as follows.
SWOT Analysis
1. Khalti has got extremely high brand
awareness across Nepal
2. Khalti was able to scale up its business
quickly after its inception
3. Offers multiple cashback options to
customers
4. Khalti is largely accepted by merchants
across Nepal, which has helped the brand
grow
Strengths 5. Strong marketing campaigns have helped
spread brand awareness
6. Word of mouth of cashless transactions
and ease of use has been accepted well by
the people
7. Strong investments from parent
companies Janaki technologies have
strengthened Khalti's position
8. Universal compatibility of app and
websites in all platforms
1. Audience in Nepal is less tech savvy as
majority consider cash as primary currency
2. Khalti has diversified too much
Weaknesses 3. Overloaded sites and slow servers
4. Increased transaction failure
5. Khalti fails to clearly communicate
privacy policy
1. Khalti can cater to a larger audience with
some offline presence as well
Opportunities
2. Khalti can educated customers on
accepting cashless transactions and online
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payments which would in turn boost their
customer base
3. Offer more banking services along with
online payment options
4. Nepal is slowly pacing towards digital
economy
1. Banks offering e-wallets on their saving
accounts
2. Security and privacy of user is a concern
for Khalti
Threats
3. Highly capable competitors
4. Connectivity problems in many areas
Business Problem Analysis and Solution
A. Problem Analysis
Khalti is a popular method of making online payment all around Nepal .it has been
growing as a trusted company because of its quality service to its customers.
However, Khalti has to deal with various challenges that may create problem in its
operations and functioning.
Challenges that Khalti must deal are mainly government regulations and Limited use
of electronic payment in Nepal. Some of the problems in Khalti can be presented as
follows.
a) Limited Reach
Since Nepal is only engaged in receiving money it has been difficult for Khalti to
establish itself internationally. Khalti even doesn't solve problem of how to get paid
by someone from outside Nepal. Thus, Khalti has a limited reach only within Nepal.
Even the difference in laws among the countries maybe another issue for Khalti to
run internationally. The different culture and legal policies are the hurdles in the
expansion of Khalti at the international level.
b) Government Policies
In Nepal credit card payment system has not yet immersed completely. Though few
banks provide the credit card facility, people do not use credit card for payment. The
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reason behind this may be the government policies that doesn't allow payment for
international purchase through credit card. The government has not yet entirely
supported the credit card system that makes it difficult to use Khalti.
c) Lack of Public Awareness
On the other side people still prefer cash rather than the digital cash inefficient user
interface is another problem regarding Khalti. People lack proper knowledge
regarding the use of Khalti due to the complex system. They still use the traditional
payment system they are not entirely aware about the use of electronic device for
payment system and though they know they may fear if they make commit mistake
while using such Technology. They are not aware about the ease and benefits of using
Khalti.
d) Lack of Co-ordination
Similarly, problem of coordination can also be seen between the system of Khalti and
the organization linked with it. The information doesn't get updated as timely as
required the payment may be recorded in one side but the receipt of that payment may
still be due to get recorded in the other side. Such delay in update of the data in lack
of coordination may lead to confusion and later to customer dissatisfaction.
All of these problems are critical and should be handled very carefully but it is also
not an impossible task to solve these problems. If all the problem regarding Khalti are
sincerely considered and solutions are dug out Khalti could be made popular among
people and maybe internationally too.
B. Solutions
Problems remains problems until they are not provided with solutions. Technologies
are developing at a great pace and thus, it is not a very difficult task to derive solution
to the problem of Khalti.
a) Creating Awareness Among People
The idea of Khalti should be made broad and every people should be made
understood about the efficiency and use of Khalti. They must be made aware about
how reliable and easy this service can be. The system could be more simple and
flexible so that even all the illiterate people can understand and use this concept.
Thus, the user access system should be simplified for less educated people
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b) Convincing Government
The government could also be convinced by making more effort to allow online
payment for international purchases using credit card. People should also be made
aware about the credibility and usefulness of credit cards so that they would start
using credit card for day transactions rather than cash. The problem of difference in
laws among the countries could be solved my understanding each other's cultural
norms and values and developing policies favourable for both the countries involved.
c) Better Co-ordination
There should be better coordination between the Khalti and the organization using
this system for providing services to the consumer. The transaction conducted through
Khalti must be updated as soon as possible so that the consumer would not suffer or
be in confusion. The payment and the receipt must be recorded in the account of both
parties involved in the transaction without any delay.
Hence even though Khalti is a safe and secured means of e-payment in the Nepal,
there are some aspects that should be improved in Khalti services. Frequently updated
security mechanisms would help in maintaining trustworthy online transactions. In
order to counter power cut problems there can be arranged backup servers. Provision
of 24/7 customer service anywhere with in Nepal would definitely strengthen the
service of Khalti and the arrangement of payment gateway facilities beyond the
territory of Nepal could help Khalti to upgrade its services internationally.
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Conclusion and Recommendations
Khalti, one of the sister companies of Janaki Technologies, is a growing e-wallet that
has over 35 thousand customers. Khalti is expanding its customer base despite of its
head-to-head competition with eSewa having millions of customers in Nepal. Unlike
eSewa, Khalti is not backed up by any payment gateways. Rather, Khalti has its
sponsors and partners as banks like Nepal Investment Bank Pvt. Ltd. And
Machhapuchchhre Bank Ltd. Khalti was established with a long-term vision of
making Nepal cashless. The problem for success of this vision is the security concern
among people and lack of technical know-how in using e-wallet. It is easy for
customers to use Khalti because of its user-friendly interface unlike eSewa which
requires more effort to use and understand. Moreover, Khalti is teaching old
generation people to use this app. It shows that Khalti is targeting every type of
customer from young to old. The security concern is backed by secure payment and
rather than saying Khalti is a secure payment, the customers can find the security in
using Khalti. Moreover, Khalti is sponsoring different events to make Nepalese
citizens friendly with e-wallet systems. Even different merchants and banks are not
easily investing in Khalti, but as they see the opportunity, they do not hesitate to put
their money on Khalti.
Khalti has tackled eSewa by cash back policy and easy to understand and use. Still,
Khalti has to attract different investors for sponsorship so that it can maintain the cash
back policy when the thousands of customers reach to million. Tying up with major
banks provide a security to the users as they feel safe about it – if anything goes
wrong then they have the backup of these banks. The vision of cashless Nepal can be
achieved when the stereotype on online payments (cash is the only secured payment
system) is removed from the customers.
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Sources of Data
For the purpose of this study of Khalti, both primary and secondary data are collected.
As a primary source, representative from Khalti was interviewed. As secondary
source, Khalti website and app were studied to gather general information about the
subject matter.
Limitations of the Study
This study is not a full-fledged analysis of Khalti as no customer and partner
merchants’ experience was considered. This study is merely based on personal
interview of Khalti representative and study of Khalti website Khalti mobile
application, and leaflet. No market survey was done to figure out the actual
experience of Khalti users.
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Bibliography
www.facebook.com
www.google.com
www.wikipedia.com
www.youtube.com
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