The country needs to move to a society where more electronic transactions and less cash transactions are conducted and thereby reduce the cost of transactions. With facilities in place to ensure more electronic transactions, the country is moving in the right direction at present, General Manager/Chief Executive Officer, LankaClear, Channa de Silva told the launch of the third LankaPay Technnovation Awards 2019 in Colombo recently.
The government spends 1.5 percent of the GDP on money printing and this could be saved if more electronic transactions are encouraged. The money saved could be made use for development activities, he said.
LankaPay Technnovation Awards is the country’s only annual payment technology innovation awards to recognise innovators who support consumers who are convenience driven. The ceremony will be held on the theme ‘The Clear Touch’ in Colombo on October 7.
“The awards will recognise banks and other financial institutions which champion and promote technology in transactions while recognising various players engaged in electronic payment platforms. The awards will also recognise efforts to promote the electronic mode of payment. This is in line with the Central Bank’s vision to achieve financial inclusivity,” he said. The country’s entire financial system should be transformed into a technology based system to reduce costs incurred in printing, transporting, distributing and maintaining currency notes. To this end, machine based transactions will help reduce cost and enable better use of these funds, Director, Payments and Settlements, Central Bank of Sri Lanka, Amarasiri Kumaratunge said.
He said over 60% of the transactions, especially in the retail sector, is still conducted using hard cash, and this is now becoming a social issue as well since most of them do not have bank accounts.
“The retail sector including trishaw drivers perform day-to-day business using ‘only cash’ and most of them do not have bank accounts. Due to this, when they try to obtain capital for business expansion, they are forced to go to ‘money lenders’ and then fall in to a debt trap,” he said.
“However, we could now see an upward trend in the retail sector moving to the banking sector, and this is a welcome move,” he said.
The objectives of the awards, while recognising the role played by the banks and other financial institutions to promote e-transactions, will also look at the contribution towards enhancing efficiency of the country’s national payment gateway network to achieve financial sector stability.