Central Bank steps in to smoothen flawed payments platform project
An apparently flawed process where an agreement was signed between a state IT agency and the private company to develop Sri Lanka’s national payments gateway 10 months before cabinet approval was received, came to light after Central Bank (CB) intervention. The CB said it would review the entire process of the National Payment Platform (NPP) indicating that while this subject should come under their purview, the due process doesn’t appear to have been followed. The peculiarity of the CB not being fully consulted on the selection of an operator to handle an online payment process for those without credit or debit cards, was revealed after new CB Governor Indrajit Coomaraswamy raised concerns during a media briefing last month.
Digging deeper, the Business Times found that in September 2015, Transact Lanka (Pvt) Ltd, a mobile payments and funds transfer service provider, was awarded a contract by the Information Communication Technology Agency (ICTA) to develop the new payments platform which would enable Sri Lankans to make cash payments for all government related payments including Customs duties, port charges, revenue license, taxes, etc. The new Governor told reporters that the CB will inspect each and every detail in the NPP before giving the go-ahead, adding that Deputy Governor P. Samarasiri had been appointed to oversee the implementation of the NPP. While there is no record of an ICTA announcement in September, Transact Lanka issued a media statement on September 9 saying
“ICTA has awarded and granted it permission to operate the Lanka Government Payment Service (LGPS) Web Portal to enable citizens to make cash-based payments for all government related payments”. Transact Lanka said this service is due to be launched 1Q/2016 (between January-April). It was the 2016 budget presented in November 2015, two months after a developer was appointed, that spoke of “the introduction of the National Payment Platform (NPP) enabling the public to transfer funds from any of their bank accounts through the mobile phone for the payment of goods and services using their NDI. The National Payment Platform will bring in savings for the government by increasing efficiency thereby reducing cash movement and the cash float in the market.”
On 12th July 2016, 10 months after ICTA had found a developer for the NPP, the cabinet approved the “introduction of a NPP to facilitate digital commerce and online transactions”. The ICTA was directed to implement the NPP with the CB facilitating its implementation. What was the process of selection of Transact Lanka; were tenders called; who were the other bidders; was the CB involved in the selection of Transact Lanka, if not why; were some the questions raised by sections of the IT community. “If cabinet approval was given in July 2016 on a budget proposal made in November 2016, how was the developer of this platform already selected?” one analyst asked, saying that normally public tenders are called for a project of this magnitude.
When asked, Wasantha Deshapriya, Secretary of the Ministry of Telecommunication and Digital Infrastructure, said the selection was made after bids were called by ICTA. He said while the CB was not involved in the process initially, some adjustments are being now made on the directions of the CB. The banking regulator is now expected to take over the project and bring it under its supervision. The NPP is to be the country’s first non-credit card payment gateway for citizens without credit cards. Those who have a regular current/savings account (which applies to the large majority of the population) will be able to make payments directly from their mobile phones (also owned by a large majority of the population) through the web-based payment portal.