Digital transactions: Immense potential for growth

By Lalin Fernandopulle

Less than 10 percent of the population use e-card for payments in Sri Lanka which indicates there is immense potential for growth in digital transactions, said Country Manager, Sri Lanka and the Maldives, Visa Worldwide Pte. Limited, Anthony Watson at a panel discussion on ‘The Digital Landscape in Sri Lanka’ organised by the Payment Card Industry Association of Sri Lanka (PCIASL) and Visa last week.

He said there is no reason why Sri Lanka should be slow to switch to digital payment systems when the world is fast moving with technological evolution. Convenience and speed in transactions should drive the growth of digital transactions.

Sri Lanka still has only around 43,000 Point of Sales (POS) machines which depicts the scope for expansion in sophisticated transaction modes.

Sri Lanka has 23 member banks that deal with payment cards.

However, banking and financial sector experts are of the view that given the cost of transactions, the emotional aspect of personal transactions, where one could touch and feel the commodities they purchase and the enormous risk in e-payment systems worldwide, many prefer cash transactions to digital transactions.

HNB Managing Director/CEO Jonathan Alles said it is time that all stakeholders come together and draw up a plan for e-commerce that will ensure feasibility and security to users ofdigital payment systems.

“There are multiple payments systems in the country with many coming up with new products and systems but no one has given thought to what customers really need.

They have not taken into consideration their aspirations and challenges. It is vital that industry stakeholders recognise the pulse of customers and address those needs in the new payment systems,” Alles said.

The panelists said it is easier said than done, to move towards digital payment systems. Low financial literacy, the cost of digital payment penetration and security should be looked into seriously before coming up with new payment systems.

Director, Central Bank Payments and Settlements Department, Dharmasiri Kumarathunga said the Central Bank, as the regulator, plays a major role in digital payment transactions. It has come up with a road map for a e-payment system. It is up to the stakeholders to present their views to embark on a road map for the next five years.

“The security, dual authentication, awareness programs for bankers and teachers are some of the factors that have been taken into consideration in the road map up to 2020,” Kumarathunga said.

A panelist said taking into account the cost of cash, it is wiser for transactors to switch to digital payment modes which is an efficient way of doing transactions.