Popular Local Payment Methods and Solutions in Sri Lanka

Introduction

Sri Lanka’s population of just over 22 million is widely credited as being digitally savvy, boasting over 14 million internet, and 7 million active social media users. While it earns its acclaim as a digital success story, there is one notable exception — digital payments.

Sri Lankan businesses and consumers have not adopted digital payments with the same enthusiasm seen in their adoption of social media and other digital services. During COVID-19 lockdowns, there was a 600 percent spike in internet banking volumes and fintech app registrations increased by more than 200 percent, but there has not been too much of a corresponding increase when it comes to on-premise (at the shop) retail and distributor payments. Many retailers and distributors prefer traditional payment methods of cash and cheque payments.

Why are Digital Payments Lagging in Sri Lanka?

Although the country enjoys a banking penetration rate of 74 percent through an island-wide branch and ATM network, coupled with an uptake in digital banking and internet-based payments that kicked off with the pandemic, digital payments across the country are still lagging. There is not much of an incentive for consumers and businesses – specifically at retail points and within the distribution chains – to move to digital payments since they are used to cash or cheque transactions. At the same time, merchants are also not fully aware of the potential savings that can be achieved by embracing digital payments.

Low levels of digital literacy, limited access to smartphones outside of the Western Province of the country – Sri Lanka’s most urbanized province and home to the country's capital and commercial center – a general lack of trust in new technology, and concerns about the legal and regulatory aspects of the relatively unchartered territory of retail digital payments are some of the possible reasons for the slow adoption. These are all challenges that regulators, telcos and financial institutions can help to overcome.

Another significant difficulty is posed by language. With two official languages – Tamil and Sinhala – reaching the entire population can be somewhat difficult. Although English is used in administration and as a bridging language, only around a quarter of the population uses English, and currently, most digital payment platforms are only available in English.

Digitalization presents significant opportunities – from spurring economic activities and creating new jobs to being able to reach the as yet unreached.

Across the globe, Transfi actively champions and supports responsible, innovative solutions to reach different corners in the economy and digitize the financial operations. In Sri Lanka too, the move to accelerate digital financial inclusion – bringing even the smallest of transactions into ease – has been one of the key areas of focus in Transfi’s work in the country.

What to look for while choosing digital payment solutions in Sri Lanka

Payment platforms pave the way by facilitating payments between buyers and sellers. But as a business, if you want to employ the services of a payment platform, you need to look for a few criteria before taking the plunge. Here are some things to look out for before shortlisting a payment platform:

Reliability

When dealing with financial and monetary standards regularly, you need to consider a reliable payment platform with a reputable market standing. This way, whenever you or your customers transact online with your business, you know your business is in safe hands, and you won’t be tricked.

Support currencies

As you expand your business to other countries, you must accept payments in different currencies. However, not every payment platform accepts payments in multiple currencies, which can often be a deal breaker. Every country’s payment platform provides various local and international currency options, allowing the local population to receive/send payments via their preferred mode.

Payment options

A good, reliable payment platform offers plenty of opportunities for users to make payments via different payment methods. These might include payments via the following channels:

Credit cards
Debit cards
Net banking
Digital wallets

The list is not exhaustive; what’s important is that you need to have the facility for your customers to make payments without worrying about transaction safety.

Market integration

The first sign of a successful business is expansion and market integration. As you develop your business and venture out into newer markets, you will always want a payment option that works well with the inherent local currency. The idea is to provide convenience to your customers to pay in the local currency.

Security

The internet is full of fraudulent scamsters who leave no opportunity to hack into financial accounts and steal confidential information. A secure payment platform needs several layers of encryption that prevent hackers from stealing customer information. Plenty of payment platforms in the market provide secure transaction level security to businesses and customers alike.

Pricing and other options

You need to consider the different pricing, transactional, and conversion fee applied to payments received via the payment platforms. As a business, you can even employ multiple payment platforms to choose the one that offers the best pricing and transactional fee when sending/receiving payments.

Look at no other solution when it comes to running your business smoothly on the side of finances - managing transactions, secure flow of money, customer support, it’s all covered with the cost effective solutions of Transfi.

Also read about: Popular Local Payment Methods and Solutions in Norway

The Best Way to Accept Global and Local Payments at one place

Transfi offers a full-service payment infrastructure that enables your business to accept payments from Sri Lanka and beyond. Our platform is designed for global payment processing, with a scalable solution that can grow as your business expands.

By choosing Transfi as your payment service provider, your business can take advantage of a range of benefits, including:

A variety of payment methods, from debit and credit cards to digital wallets and local payment methods.

Developer-friendly APIs for a custom website integration, to create the optimal checkout experience for your customers

PCI DSS Level 1 compliance, ensuring that every transaction meets global security standards.

Multi-factor authentication through the 3D Secure 2.0 (3DS2) system, providing protection against fraud.

Customer insights and transaction reports, available through the user-friendly Pay Dashboard.

Transparent pricing with a straightforward flat-fee per-transaction structure, enabling you to upgrade your payment platform with no hidden fees.

Click here to create your Transfi account now!

How is digitization revolutionising the Sri Lankan economy

Fintechs have brought about a massive change in the Lankan economy by bringing payments and finance on a usable and easy to navigate base. Fintechs aren’t the only ones impacting the financial services scene. Many commercial banks have also entered the digital arena with their own competitive applications. for tasks such as opening a savings account to take place online, ultimately embracing digital transformation in various ways.

There have been other efforts to organically boost the sector in the wider financial ecosystem. This includes the creation of the Fintech Association of Sri Lanka (FASL). FASL is an independent, not-for-profit, and cross-industry organisation representing the Sri Lankan and global fintech community to support the development, innovation and investment in the fintech sector.

Despite Sri Lanka’s challenges, fintech could help further boost its wider economic development and hopefully reset it toward the path to prosperity.

Conclusion

By understanding what each of the local and digital payment methods provide, you can identify the pros and cons of using each payment method whether it is for personal or business use. Based on the purpose of using, you can take advantage of the ones that fit your business and spendings best, as it will not only help you save time and efficiency but also help you avoid unnecessary hidden fees and charges. In this day and age of moving towards growth and digitization in Sri Lanka, Transfi brings the perfect blend of what one would need in their digital payment activities.

If you’re still unsure about which payment solution to use in Sri Lanka, the answer is definitely Transfi. You can use it anywhere digitally with ease and promptness.

Frequently asked questions (FAQs)

How has digitization impacted Sri Lanka’s economy?

What's the safest way to accept payments in Sri Lanka?

The safest way to accept payments in Sri Lanka is through Transfi. We comply with the highest level of PCI DSS security standards through tech like tokenization, which hides transaction details in transit.

Why are Digital Payments Lagging in Sri Lanka?

How can my business accept digital payments from Sri Lanka?

Your business can easily accept payments from Sri Lanka with Transfi. We offer global payment processing for a wide range of payment methods popular in the region. When you work with Transfi, you can let your customers pay you the way they want, while knowing that your payment system is completely secure.

What are the criterias to look out for payment platforms in Sri Lanka?

Reliability
Supported currencies
Payment options
Integration
Security
Pricing

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