IMAGE VIA CAPITAL NEPAL
FOR 170 years or so the Khetan Group made its money from beer, mining and cement. Now it is placing a wager on something it cannot bottle, dig or stack: the digital plumbing of a poor country’s payments. In buying a 14% stake in Fonepay, Nepal’s near-monopoly QR network, the conglomerate has swapped breweries for bits. The move looks shrewd. It also looks scary.
Fonepay processes 96% of Nepal’s person-to-merchant QR transactions—over 2.5m daily, worth more than Rs20bn. Nearly every bank’s mobile app runs on its rails. Merchants display its code because customers expect no other. This is network effects at their most muscular. The Khetan family, which sold its Gorkha Brewery stake in 2023, took the cash and bought into the switch. The logic is that owning the payment infrastructure beats owning the products that move across it.
Yet the deal reveals something more troubling. Nepal’s central bank, Nepal Rastra Bank, has spent years preventing commercial banks from issuing their own QR codes, forcing them to depend on private operators. It licensed Fonepay as a Payment System Operator, then built a wall around that licence. The result is not competition but a private utility. Fonepay’s competitors exist in name only. Interoperability, which sounds democratic, conceals a single point of control.
The Khetans see what the regulator does not: data is the new deposit. Their stake in Laxmi Sunrise Bank, combined with Fonepay’s transaction flows, confers a rare chance to build credit scores, micro-loans as well as targeted offers in a credit-starved economy. Payments may stay free for merchants. The money will come from the services layered on top—insurance, lending, wealth management. That is platform capitalism 101. But when one family controls both a bank and the switch, the line between smart investing and systemic capture blurs.
Systemic risk is the price. A cyberattack or technical failure at Fonepay could halt a fifth of Nepal’s daily digital commerce. There is no backup. The central bank’s oversight—an Infrastructure Development Fund, prior approval for dividends—tinkers around the edges. It does not challenge the structure. It assumes the monopoly must work, and not be replaced.
So the Khetan bet makes perfect sense for the Khetans. They have locked in a pre-IPO valuation, gained a seat at the table of Nepal’s financial future,and turned old industrial capital into a claim on every QR swipe. The question for Nepal is darker. When a country’s payment operating system becomes a private asset, backed by a conglomerate that also owns a bank, the efficiency gains come with a fragility that no regulator has yet learned to manage. Cheers to that—but do not spill your drink. ■
