ECONOMYNEXT – Indian tourists will be able to pay for their purchases in Sri Lanka through their mobile phones using QR codes after a tie up between Lanka Pay and India’s PhonePe, officials said.
With India being the top source of tourists to the county, the tie up will strengthen bilateral relations co-operation, Central Bank Governor Nandala Weerasinghe said.
Enhancing cross border payments was a priority among policymakers, and in Sri Lanka the central bank was also supporting cashless payments, he said.
India has seen a surge in online transactions especially through mobile phones, India’s High Commissioner in Colombo Santosh Jha said.
PhonePe, which uses India’s Unified Payment Interface will now allow Indian tourists visiting the country to pay at large network of merchants which use the LankaQR system of LankaPay.
As of 2008, India was the world’s most unbanked which banking penetration of less than 20 percent, High Commissioner Jha said.
In the last decade banking penetration had shot up to over 80 percent. In 2016 India mostly used cash, and now has the highest volume of digital payments globally.
“The digital transformation of India has been driven by the interoperable and open protocols such as the UPI,” he said.
He said the need to pay taxes and government benefits to the citizens gave birth to India’s digital identify number and the unique identity authority.
Governor Weerasinghe said Sri Lanka’s digital payments were also growing but not at the pace of India.
Sri Lanka however has had a banking system spread out around the country, and a unique identify number – which can be presented at the users own volition – for decades.
People receiving government subsidies in Sri Lanka not only had bank account but also a savings component in their own banking system from which they could also get a loan if they needed, from the inception of the program, observers point out.
A new scheme subsidy schemed launched last year required all recipients to have accounts in the larger system and only about 200,000 did not already have accounts in the designated banks.
Central Bank data shows that Sri Lanka which has a population of about 20 million already had about 20 million debit cards, with some having cards from multiple banks.
There have been claims that Sri Lanka is ‘overbanked’ and needs ‘consolidation’.
(Colombo/May16/2024)