LANKA QR-based payment system gets ready for public launch

Smartphone- based mobile money service is now gaining momentum as part of the payments ecosystem in Sri Lanka.

The Central Bank ( CB)’ s association with financial institutions payment networks for LANKA QR- based payments has paved the way for players to offer new solutions in this space. The plan is to promote digital transactions with commercial banks.

98 per cent of local banks are now ready with the adaptation to LANKAQR, common Quick Response (QR) code standard, Dharma Sri Kumaratunga, Director of Payments and Settlements in the Central Bank said

The public launch of the system will take place under the patronage of Prime Minister and Finance Minister Mahinda Rajapaksa tomorrow, he told the Business Times.

In Sri Lanka, more than 80 per cent of adults have access to financial services and the national QR code is making those peoples’ payments faster and easier.

They can simply scan a LANKAQR Code from their mobile payment app to make payments to any merchants accepting LANKAQR Code payments, he said.

Consumers will be able to purchase any goods or services without transaction cost, and no hassle with cash, he disclosed adding that they will get instant payment notification as well.

LANKAQR is a common Quick Response ( QR) code standard adopted by financial institutions in Sri Lanka to facilitate fast, secure and low cost digital payments to any merchant, especially small and medium enterprises.

It enables customers to pay merchants directly from their bank accounts using a LANKAQR compliant mobile payment app.

The payment is instantly credited to the merchant’s bank account. The LANKAQR printed sticker is provided free of charge to merchants to display at their place of business by the member institutions of LANKAQR.

To pay using LANKAQR, a customer has to scan the LANKAQR using a mobile payment app and the merchant will receive an instant SMS notification, confirming the receipt of payment, a Central Bank notice revealed.

This is a low cost solution as the maximum Merchant Discount Rate (MDR - fees paid by merchant to the bank that issues the LANKAQR code) has been mandated at 1 per cent by the CB Payments and Settlements Department.

In order to further encourage merchants to adopt LANKAQR, the MDR will be 0.5 per cent during 2020.

There is no cost to the customer in using LANKAQR based payments. It is envisaged that this would encourage digital payments in the economy and reduce the cost of cash management, as well as formalise the informal sector, the CB notice said.