Sri Lanka has emerged as the fastest adopter of digital payments in South Asia, according to Visa Corporation. Since 2019, the country has seen a significant 20% increase in digital transactions, particularly among debit card holders, reflecting a shift in post-pandemic behavior.
“Sri Lanka is clearly one of our fastest-growing markets in South Asia. We see a strong recovery from the economic downturn. More and more consumers are entering the digital payment ecosystem, which is a very healthy indicator for the country,” said Ramakrishnan Gopalan, Visa’s Vice President and Head of Products for India & South Asia.
He projected continued high double-digit growth in digital payments and card penetration in the coming years. Visa is preparing to relaunch its Infinite card initiative, targeting high-affluent consumers in the region. Gopalan noted that affluent consumers in Sri Lanka are experiencing growth rates at least three times higher than non-affluent customers.
“We see an increasing growth for the evolution of credit cards here as we speak. The emerging affluent consumers wanting more and we want to give them more,” he added during a media roundtable.
A significant trend is the rise in tap-and-pay transactions. Before the pandemic, these transactions were around 3%, but recent data shows a remarkable increase to approximately 35% month-on-month, according to Avanthi Colombage, Visa’s Country Manager for Sri Lanka & Maldives.
“Consumers are engaging more in digital platforms and digital payment channels. We see a lot of demand in the travel and lifestyle segments. This is more emotionally appealing for Sri Lankans, especially post the pandemic,” Colombage emphasized.
Despite a healthy surge in consumer spending, with US$42.65 billion projected for 2024, there is a need for more education on cashless payments for both merchants and consumers.
“A challenge that we see is there is a little bit of education needed to elevate the knowledge of merchants. Typically, the cost of cashless transactions ranges from 11-14 percent in different markets. Because we are so used to accepting cash, consumers struggle to understand the logic of the leakages, security, and benefits of cashless transactions,” Colombage explained.
Additionally, credit card balances in Sri Lanka declined by Rs. 1,894 million to an outstanding balance of Rs. 149.7 billion in May, indicating a reluctance to use credit cards due to high rates.
