You list a product for Rs. 1,000, a customer pays, and the money lands in your account. But the amount that actually reaches you is rarely Rs. 1,000. Between the payment gateway, your bank, the courier handling cash on delivery, and the taxman, several small cuts add up. For a Nepali shop running on thin margins, ignoring these cuts is the fastest way to "sell more and earn less."
This guide breaks down where the money goes when you accept eSewa, Khalti, bank transfers, and COD in Nepal — and how to price so your margin survives.
The fees hiding inside every digital sale
When you accept digital payments in Nepal, you are usually paying some combination of these:
- Merchant discount rate (MDR): A percentage the wallet or gateway keeps on each transaction. eSewa, Khalti, and bank-backed gateways each negotiate this with merchants, and it varies by your category and volume. Always confirm the exact rate in your merchant agreement — do not assume.
- Settlement timing: Money may take a day or several days to move from the wallet to your bank. That delay is a real cost when you need cash to restock.
- Bank charges: Some banks levy fees on settlements or withdrawals, especially for frequent transfers.
- COD remittance fees: For cash on delivery, the courier collects cash from your customer and remits it to you, usually after deducting a delivery charge and sometimes a COD handling percentage.
- VAT: If you are VAT-registered (PAN/VAT), 13% VAT sits on top of your pricing and must be accounted for separately — it is not your money to keep.
None of these is large on its own. Stacked together, they decide whether a sale is profitable.
A worked example in NPR
Say you sell a kurta for Rs. 1,500 that costs you Rs. 1,000 to source. On paper that is Rs. 500 gross profit. Now run it through reality for a cash-on-delivery order paid via courier:
- Product cost: Rs. 1,000
- Packaging: Rs. 30
- Courier delivery charge (inside-valley example): Rs. 100
- COD remittance/handling deduction (assume around 1.5%): roughly Rs. 22
- Return/RTO risk: even a small share of undelivered COD orders eats real money — budget for it
Your Rs. 500 "profit" is now closer to Rs. 348 before you account for returns, your own time, and marketing. If the same order is paid digitally instead, you swap the courier COD deductions for the gateway's MDR — often smaller, but still real. The lesson is the same: the sticker price is not the take-home price.
Digital payment vs. COD: the honest comparison
Many Nepali shoppers still prefer COD because they want to see the product before paying. But COD is frequently the more expensive payment method for you once you count delivery charges, remittance deductions, longer cash cycles, and the cost of failed deliveries.
Digital wallets like eSewa and Khalti usually cost you a percentage MDR, but they settle faster, reduce failed deliveries, and remove cash-handling risk. A practical move is to nudge customers toward prepaid digital payment — for example, a small discount or free delivery for paying online — because what you save on COD overhead often more than funds that incentive.
How to price so the fees don't eat you
Build the costs into your price instead of discovering them at month-end.
- Find your true cost per order. Add product cost, packaging, average delivery charge, and a realistic payment fee. Do this per product category, not as one blanket number.
- Set a target margin after fees, not before. If you want to keep 30% after everything, price backward from that. A quick rule: divide your total cost by (1 minus your target margin) to get the selling price.
- Account for VAT separately. If you are VAT-registered, 13% VAT is collected on behalf of the government. Keep it out of your margin math so you are never short at filing time.
- Use payment method to your advantage. Offer a prepaid incentive and reserve COD for higher-value or repeat customers where the return risk is lower.
- Reprice for peak season. During Dashain and Tihar, order volume and courier load both spike, delivery timelines stretch, and return rates can rise. Build a small seasonal buffer into your pricing rather than absorbing it.
Watch your blended rate, not single transactions
One Rs. 200 sale losing Rs. 8 to fees feels trivial. A thousand of them is Rs. 8,000 — possibly a full day's profit. Track your blended cost of payments: total fees paid across the month divided by total sales. If that number creeps up, it is a signal to renegotiate your merchant rate, shift customers to cheaper payment methods, or adjust pricing.
This is also where keeping everything in one place pays off. When your store, POS, payment options (eSewa/Khalti/bank), and delivery run on a single platform like Saauzi, your orders, settlements, and courier charges sit in one dashboard — so you can actually see your blended payment cost instead of reconstructing it from screenshots and bank SMS.
Quick takeaway
Before you set your next price, do this in ten minutes:
- Pick your three best-selling products.
- Write down product cost + packaging + average delivery + a realistic payment fee.
- Confirm your actual MDR and COD remittance rates from your provider agreements — no guessing.
- Price backward from the margin you want to keep after all of it, and keep VAT separate.
Do that once per quarter and during Dashain–Tihar prep, and digital payments become a growth tool instead of a quiet leak in your margins.
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