Cargills extends payment ecosystem and space to SMEs | Daily News

Cargills extends payment ecosystem and space to SMEs

Haridas Fernando and Asoka Pieris sampling products at ‘Village to Home’ at FoodCity Rawathawatta. Picture by Saliya Rupasinghe.
Haridas Fernando and Asoka Pieris sampling products at ‘Village to Home’ at FoodCity Rawathawatta. Picture by Saliya Rupasinghe.

Cargills has resumed extending space and payments processing infrastructure to SME businesses at Cargills locations.

Cargills is hoping to grow its payment ecosystem and champion rights of the merchant. The resumption follows the gradual decline in risk from COVID-19. Selected SME retailers on certain days can retail their products outside select Cargills locations.

Managing Director Cargills Asoka Pieris noted that most of the products Cargills stocks are from local manufacturers. He said, “We at every opportunity look to support local products.”

Deputy General Manager Cargills Haridas Fernando said, “SMEs sometimes don’t have access to the market. With this, we mainly target new people to register their products with us.” Fernando noted that the clientele that visits Cargills on average have more disposable income than the regular customers of the SME. He said that businesses would get a better feel for customer tastes through these stalls.

Pieris and Fernando were speaking at the relaunch of ‘Village to Home’ at Cargills FoodCity Rawathawatta on 6 February. Fernando noted that with COVID-19 the extension plans have been changed and they are focusing now on expanding the scheme at Provincial outlets.

Cargills Bank, a subsidiary bank of the Cargills group, has extended digital payments processing infrastructure to the stalls. Stalls will mainly use LankaQR. A Point of Sales (POS) card processing machine can cost as much as Rs 70,000 and/or be linked to a high minimum monthly usage. They remain beyond the reach of most SME businesses. Currently, there are 1.5 million businesses in Sri Lanka but only 80,000 POS machines.

Processing of payments usually is accompanied by a Merchant Discount Rate (MDR)which acts as a percentage charge on the value being processed. MDR is around 2.5-3% for Credit/Debit cards and .5% for LankaQR payments. Revenues from MDR through credit/debit cards tend to be split 70% to the card-issuing bank and 30% between the operator of the payments gateway and the payments processing company (VISA/Mastercard).

Credit/debit card processing is very profitable. Banks are disinclined to provide cheaper payments platforms like LankaQR as it is less profitable for them. Cargills however as a leading merchant is extending payments support through LankaQR to SME businesses.

The larger banks have a systemic advantage, with more cards and POS machines, of a larger payments network. Manager-Merchant Business Cargills Bank Sameera Rowel said, “the chances of a Cargills card being swiped at a Cargills machine is quite low.”

Cargills Bank is offering 5% cashback on the total bill at Cargills FoodCity with the usage of a Cargills Bank credit card. The bank is also issuing 3-month 0% instalment plans for bills above 5,000.