Cash to Cashless Economy: Consumer Perceptions of Digital Transactions in Kathmandu

Abstract

Background: Nepal’s rapid growth in mobile banking, e wallets, and QR payments is reshaping urban financial behavior, yet adoption remains uneven due to infrastructural, behavioral, and trust barriers.

Objective: This study examines how performance expectancy, effort expectancy, social influence, and facilitating conditions shape consumer perceptions of digital transactions in Kathmandu Valley.

Methodology: Using a quantitative design, a structured questionnaire was administered to 391 users of eSewa, Khalti, IME Pay, and Fonepay. Data were analyzed in SPSS via descriptive statistics, reliability tests, and multiple regression.

Findings: All four factors positively and significantly influence consumer perceptions; performance expectancy and facilitating conditions are the strongest predictors. Users value convenience and efficiency but cite connectivity issues, security concerns, and low digital literacy among older adults as constraints.

Conclusion: Digital payments are viewed as efficient, yet infrastructural and behavioral challenges impede a full cashless transition. Enhancing reliability, security, and user awareness is critical.

Implication: Policymakers, banks, and fintech firms should prioritize infrastructure, regulation, and financial literacy to build a secure, inclusive digital payment ecosystem.