The Central Bank expects at least half of the banking and financial sector institutions to make full use of the Lanka QR Code which has been standardised to promote digital transactions, a top official of the Central Bank said at the launch of the Digital Transactions Year by the regulator in Colombo last week.
He said only a few banks and financial institutions make use of the code and added that the Central Bank will provide all assistance to fast track the program.
Lanka QR is the national QR standard for local currency payments launched by the Central Bank.
“Our aim is to get banks and financial institutions to implement the code under the initiative to shift towards a cashless society through the use of technology,” Central Bank Deputy Governor H.A. Karunaratne said. The committee set up by the Central Bank will prepare an action plan that will be communicated to all banks and financial institutions to fast track the program.
The committee will monitor the implementation of the program which involves awareness sessions for employees in the banking and financial sector and promotions across the media.
Cargills Bank PLC Managing Director/CEO Rajendra Theagarajah said the Lanka QR Code is a great initiative which the banking sector must make good use of to enable hassle-free transactions.
“The banking sector welcomes the role of fintech players who are here to stay and play a vital role in the financial sector,” he said, adding that digitisation of transactions will not only help bring down the cost of transactions but also help address gender based issues through financial inclusion.
Commending the efforts by Sri Lanka to promote digital transactions, an IFC official said there is ample room to popularise the use of digital payment tools in the country as less than 15 percent of the citizens use debit cards and less than 10 percent credit cards.
However, according to financial sector experts, the cost of on boarding for initiatives of this nature including biometric identifications is enormous and small timers are unable to afford it.
“Cash payment schemes, the brick and mortar in the financial sector cannot be eliminated within a short time as they need substantial investments and time to phase out operations,” a senior officer of the Central Bank said.
The Central Bank named 2020 as the year of digital transactions to popularise digital payment schemes already introduced to the country by commercial banks, other financial institutions and LankaClear (Pvt) Ltd. Awareness is the key to increased use of mobile payment applications. The Bank believes that this initiative would help take the country forward in terms of technology and therefore, the Payment and Settlement Department (PSD) of the Central Bank has taken several steps to raise public awareness on digital payment modes. As the first step, the PSD organised a payment app awareness session for the staff of the Central Bank recently. A number of institutions which facilitate payments through mobile payment apps using payment modes such as JustPay and QR Code, were present. This initiative aimed at helping staff familiarise themselves with mobile payment apps, specially to settle utility bills and transfer of funds between accounts.