JustPay powers first cashless sale in Sri Lanka | Sunday Observer

JustPay powers first cashless sale in Sri Lanka

JustPay, an initiative of LankaPay to convert the large number of cash based retail payments into cashless payments, went into full swing at the MAS Arena, Royal College recently.

UPay, the first JustPay powered smart phone app to go live, conducted a historic cashless sale in partnership with Cargills Bank, with the participation of more than 75 smalltime merchants and a large number of enthusiastic smartphone users.

This was a step forward in moving Sri Lanka towards a less cash society as the norm for such an event was to use cash as the payment mode especially when smalltime merchants are involved.

Since a majority of the merchants in the country are smalltimers where the number of daily transactions at each outlet are low in value and limited in number, many thought it would not be practical at all to move them away from cash.

The primary obstacle to reduce cash transactions was the commission (Merchant Discount Rate or MDR) charged by banks from merchants for use of credit/debit cards, which hovered around 2-3% of the transaction value.

Considering the low profit margin for small merchants from each sale, which was around 5%, parting a significant portion of their profit has always been a challenge.

LankaPay understood this roadblock from the onset and removed this barrier by lowering the MDR for JustPay, so that the merchants would not have any objections to parting with a smaller commission in return for increased sales.

To facilitate this, all member banks of LankaPay real-time payment system have agreed to reduce the electronic fund transfer fees to a nominal value to facilitate retail payments via JustPay.

The opportunity created by this major shift in the current payment system has encouraged innovative FinTech players, such as UPay, to come forward with solutions that provides ultimate consumer experience. The need of finding merchants, making transactions in real-time and rating the merchants based on the user experience would be addressed by the innovative apps that uses JustPay payment mode.

UPay provided an ultimate convenience and a consumer experience to their customers at this cashless sale, by providing a smart phone app that a user could simply scan a QR code of a merchant and JustPay at checkout.

Most consumers who attended the cashless sale at the MAS arena were surprised by the seamless mechanism UPay provided them to make a payment. These are the types of innovations that JustPay intends to bring to the market by providing a level playing field for such innovators to compete on the merits of their innovation.

The ultimate winners of this journey are the public who enjoy convenience and the country as a whole when the usage of cash would gradually reduce over time.

Previously, the merchant and the customer had to maintain bank accounts at the same bank, if they were to carry out a transaction via a fund transfer, which did not scale.

However, LankaPay common real-time switch makes it possible to transfer funds without having to maintain accounts at a common bank. This was an absolute game changer.

A customer can simply register with the acquiring bank of UPay via the app by providing his bank details. When this simple onetime registration is completed, he/she can simply pay through the app with one click for every purchase by selecting the JustPay payment option. In real time, the system would debit the customer’s account regardless of his bank and credit UPay’s merchant account at the acquiring bank.

The same principle that provided ultimate user experience to UPay customers would be applicable not only at the just concluded cashless sale, but also at a hardware shop, corner grocery shop, pharmacy or even a vegetable vendor at the Sunday fair.

The applicability of this principle would be widespread and only be limited by the extent of the imagination of such innovative FinTech companies.

To further simplify the payment process and improve customer experience, LankaPay is in the process of implementing a centralised system where the account holder’s bank would be responsible to issue a nickname to each of their authorised bank accounts.

Once this system goes live, a customer would merely need his mobile number or NIC and the nickname of the bank account he/she wishes to use to register with a payment app via his smart mobile phone and the centralised system would translate this information into carrying out the registration. Once registered, a user would only need to know the other party’s mobile number or NIC and the nickname to make a real-time payment.

This centralised system would be available within a few weeks and would further simplify the process. LankaPay is also in the process of introducing a standardized QR code for the merchants end with the concurrence of Central Bank. All a merchant would require in the future is just a QR code sticker pasted at his shop to accept a payment and a low cost mobile device to receive a SMS to indicate that his account has received the payment.