More offers for card payments in next budget
View(s):Sri Lanka’s 2017 budget due in November is likely to spell out more concessions for the card payment industry with the banking regulator asking consumers to use less cash. Referring to the concessions made to card payments in last year’s budget, Central Bank Director Payments and Settlements Department Director Dharmasiri Kumaratunga said they were expecting “to do something for this time’s budget as well.” However, he didn’t provide details of the likely concessions.
Speaking at a panel discussion on Thursday in Colombo organised by Visa International and the payment cards industry association to identify ways to increase the use of cards, he noted that they were also aiming at reducing cheque clearing and working on the development of a common Point of Sales (POS) system. In the 2016 budget, the stamp duty charge of 1.5 per cent for credit card purchases made locally was removed while this duty on foreign purchases was increased to 2.5 per cent.
Central Bank’s Kumaratunga stated that they were involved in creating awareness among professionals like teachers and bankers to increase use of cards for payments and has already drafted a national policy for a payment system. He also highlighted the future of a common ATM network ensuring no surcharges would be made for using the terminal of another bank and better authentication methods. During the discussion HNB MD/CEO Jonathan Alles stated that the digital payments systems needed to have a better reach by ensuring the bazaar were connected through the digitised systems that would make payment easier.
Sri Lanka currently has about 700,000 credit card users and the figure is similar in the case of debit card users, income tax files, which reflects the picture of who is actually using the card payments, Nations Trust Bank Consumer Banking DGM Priyantha Talwatte said. He called for the government to take a cue from countries like Korea that create incentives for the businesses that use the digital payment system. Interestingly, it was revealed that Sri Lanka has only about 43,000 POS terminals, a majority of which are located in the Western Province, in a country that has a 90 per cent mobile penetration and about 5 million Internet subscribers.
These figures that Visa Country Manager for Sri Lanka Anthony Watson highlighted brought to the fore the current capacity and possible increase in penetration for the card payment industry which he stated could leap frog in terms of digital payments within a 10- year period. Another interesting figure Mr. Watson stated was that Sri Lanka is said to have less than 10 per cent of its transactions online with the sale of books being the fastest transactions in ecommerce followed by groceries and the purchase of cars. -(SD)