Member of Parliament Wijeyadasa Rajapakshe (Pictured) called on the Central Bank in partnership with the Finance Ministry to increase the utilisation of the domestic payment’s infrastructure. He noted that other countries were able to implement successful systems and called on officials to mirror them.
“We have these credit cards, from the vegetables in Jaffna to the rice from Anuradhapura to purchase from the supermarket we use these credit cards. For every Rs 100, we spend Rs 3 or Rs 2.5 go to America or Europe as fees.”
Rajapakshe was speaking during the budgetary debates during the second reading of the budget.
He said we have to implement a domestic payment platform. “I am happy that the Central Bank in 2019 launched the LankaQR system.” He noted that Rs 4.12 billion has been paid to overseas companies as commission for credit card usage in 2015. He noted the LankaQR system was designed for micro-transactions like buying Coconut Water or Betle leaf and if it is successful it can save a lot of foreign exchange.
He noted that India had implemented a successful payment system under the Unified Payments Interface. “We need action by the Ministry of Finance to enable this system.” He noted that major companies in Sri Lanka were not supportive of the payment system. LankaQR, JustPay, and the LankaPay JCB cards are already implemented and functional in the country without high utilisation.
Agreements with credit card companies prevent the merchant from recovering the loss due to fees from the customer. Supermarkets and other major retailers charge the same price regardless of the mode of payment being cash, credit card, or digital payment.
If the treasury and Central Bank step in to allow merchants to recover the cost of transacting from the customer then utilisation of the cheaper domestic payment system will increase.
The Common Electronic Fund Transfer Switch system (CEFTS) is currently more expensive than the Cheque Imaging & Truncation System (CITS) due to the price-setting policies of the National Payments Council of Sri Lanka even though the former is cheaper for the banks to process.
