Wallets and QR get the attention, but a large share of business money in Nepal moves the quiet way - a direct bank transfer. connectIPS is the system most of those transfers ride on, and if you invoice other businesses, collect fees, or run subscriptions, it is probably already in your bank statement whether you set it up deliberately or not. This guide explains what connectIPS is, how transfers show up, and how to reconcile them.
What connectIPS actually is
connectIPS is a payment system operated by Nepal Clearing House Limited (NCHL). Think of it as the rail that lets a person or business move money directly from their bank account to yours, across banks, without cash or cheques. A customer logs into connectIPS (or their bank's channel), links their account once, and can then pay anyone with a bank account.
For a business, this matters because connectIPS transfers land as direct bank credits - not in a wallet, not pooled, but straight into your account. There is no settlement sweep to wait for. The trade-off is that the payment carries only as much information as the payer typed into the remarks field.
connectIPS is account-to-account. Because the money arrives directly in your bank, your reconciliation anchor is always the bank statement - there is no separate provider report to net against the way a wallet has.
IBFT, RPS, and what the labels mean
You will see a few acronyms in narrations, and knowing them helps you read your statement:
- IBFT - Interbank Fund Transfer. A single transfer from one bank account to another, cleared through NCHL. This is the everyday "someone paid me" credit.
- RPS - Retail Payment Switch. The broader NCHL switch that routes many of these retail transactions between member banks.
- Standing instruction / direct debit - a recurring pull authorised once, then executed on a schedule. This is the backbone of subscription and fee collection.
The regulator behind all of this is Nepal Rastra Bank, whose payment-system rules you can read at nrb.org.np. NCHL runs the clearing; the banks are the members; connectIPS is the customer-facing front door.
How a transfer shows up in your statement
Here is where reconciliation gets interesting. A connectIPS credit typically appears with:
- The amount - reliable and exact.
- A narration - which may or may not contain a useful reference, depending on what the payer entered.
- A date and value date - which can differ, especially around cut-off times.
The problem is the narration. If the payer typed your invoice number, matching is trivial. If they typed "payment" or left it blank, you are matching on amount and timing alone - and two customers paying the same invoice amount on the same day are indistinguishable without more context.
The weakness of direct transfers is missing references. Always give customers a clear instruction on what to put in the remarks field - an invoice number, a customer code, anything. A five-second instruction to the payer saves you an hour of matching later.
Subscriptions and standing instructions
If you run recurring revenue - a gym, an ISP, a school, a SaaS - standing instructions are the connectIPS feature you care about. A customer authorises a recurring debit once, and the amount is pulled on schedule. The credits then arrive predictably, which is good, but each one still needs to be tied back to the right customer and billing period.
Recurring collection has its own reconciliation shape:
- Payments arrive on a cycle, so you can predict them - a failed or late pull is itself a signal.
- Each credit maps to a customer and a period, not a one-off order.
- Failed debits (insufficient funds, revoked authorisation) create gaps you must chase, not silently absorb.
If this is your model, the deep dives are worth reading: reconciliation for ISP subscriptions and reconciliation for school fee collection both cover the recurring case in detail.
Reconciling connectIPS credits
The discipline is the same as any bank statement reconciliation in Nepal, with direct transfers as the input:
- Pull the bank statement for the period.
- Isolate the connectIPS / IBFT credits.
- Match each to an invoice, order, or subscription using the reference where present, and amount plus timing where it is not.
- For recurring revenue, check the expected schedule against what actually arrived - the gap is your list of failed or late payments.
- Anything unmatched is a question, not a rounding difference.
Build your expected-payment list before the statement arrives. For subscriptions especially, knowing who should have paid turns reconciliation from "match everything" into "confirm the expected and investigate the exceptions".
Fees and value dates
connectIPS transfers carry charges too, though the structure differs from wallet fees. And value dates matter: a transfer initiated late in the day may credit on the next business day, which makes a day's collection look short until you account for the shift. Neither is a problem once modelled - both are problems when ignored.
Where RakamHQ fits
RakamHQ ingests your bank statement, isolates connectIPS and IBFT credits, and matches each to the invoice or subscription it belongs to - using references where the payer provided them and amount-plus-timing logic where they did not. For recurring revenue it compares the expected schedule against actual arrivals so failed pulls surface immediately. Every direct-transfer rupee traces back to a source, in a proven daily close.
Frequently asked
What is connectIPS?
connectIPS is a payment system operated by Nepal Clearing House Limited (NCHL) that lets a person or business transfer money directly from one bank account to another across banks.
What do IBFT and RPS mean in my statement?
IBFT is Interbank Fund Transfer, a single account-to-account transfer cleared through NCHL. RPS is the Retail Payment Switch that routes those retail transactions between member banks.
Why are connectIPS credits hard to match?
They land directly in your bank with only the remarks the payer typed. If that field lacks an invoice number, you must match on amount and timing, which is ambiguous when values collide.
How do standing instructions help subscriptions?
A customer authorises a recurring debit once, and the amount is pulled on schedule. Payments become predictable, so a late or failed pull is itself a signal to chase.
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