Justpay:the new norm in Retail Payments
The advantage of this system is that it would provide ultimate convenience to busy individuals. De Silva is dreaming of a day where he would be able to order dinner after work from a small boutique food outlet and get the food delivered via a delivery service such as “Quickee” or “Grasshoppers” by the time he goes home without having to physically visit the shop. “I wouldn’t mind paying a small convenience fee for making my life easier, which would save me a lot of time and the hassle. Such opportunities would lead to further innovation, as apps can be created to coordinate between small retail shops and independent delivery services so that even a ‘Thosaikade’ would be able to deliver food to homes without having its own delivery channel.
Mr. de Silva classified this as a pull payment mechanism and stated that the Justpay initiative follows this mode of payment. As of now, a fund transfer requires a customer to provide a considerable amount of details about the intended receiver of the payment including their bank name and account number etc. “It could be cumbersome at times and people would naturally shy away from a system where they have to go through a lot of steps and enter a lot of information just to make a payment. We need to make their life easier by making things simpler and absolutely convenient” said de Silva. In order to further simplify the payment process, they are in the process of implementing a centralized system where the account holder’s bank would be responsible to issue a “nickname” - Payment Exchange Name (PEN) to each of the irauthorized bank accounts. A customer merely needs to know the payment receivers mobile number and the PEN of the bank account to transfer the funds via their Smart mobile phone.
Achieving an impressive month-onmonth transaction volume growth of 100%, the revolutionary retail payment mode Justpay has the promise to become the de facto standard in retail payments in Sri Lanka. With the aim of converting the current large number of cash based retail payments into cashless, several Smart Phone Payment Apps have gone live with Justpay since January this year stated Channa de Silva, General Manager/ Chief Executive Officer of Lankaclear.
Justpay, a brainchild of Lankaclear, intends to leverage on the increasing popularity of smart phones in the country by enabling such devices to make everyday payments. With the rise in use of smart devices among the general public, more than 40% of the mobile phone have already converted to be smart phones while the adoption rate is rising steadily.
“However, if we are to succeed in moving towards a less cash society, we need to overcome one of the fundamental flaws of a card-based system for a country like ours, which is the need to deploy adevice, such as a POS (Point-of-sale) terminal, at the merchant’s end” said de Silva. He, thus, recognized the near impossibility of locating a POS terminal at every single merchant across the country. “We need a mechanism where you don’t need to literally have any device at the merchant’s side because if we are to address a larger merchant base, then the investment on the merchant’s side becomes cost prohibitive. A majority of the merchants in Sri Lanka are small timers and when the number of daily transactions at each outlet are low in value and limited in number, it would not be practical at all”.
Elaborating how Justpay would simplify the payment process Mr. de Silva said “Previously, the merchant and the customer had to maintain bank accounts at the same bank, which did not scale. However, Lankapaycommon real-time fund transfer switch (CEFTS) makes it possible to transfer funds without having to maintain accounts at a common bank. This was an absolute game changer.”
Further clarifying how the new system will work, he stated that “Let’s take the very popular transport Smart App Pickme. A customer can simply register with the acquiring bank of Pickme via the app by providing his bank account details. Once the onetime registration is completed, he can simply pay through the app with one click for every ride by selecting the Justpay payment option. In real time, the system will debit the customer’s account regardless of his bank and credit Pickme’s merchant account at the acquiring bank. This same principle could be applicable to a hardware shop, corner grocery shop, pharmacy or even a vegetable vendor at the Sunday fair.”
Mr. de Silva classified this as a pull payment mechanism and stated that the Justpay initiative follows this mode of payment. As of now, a fund transfer requires a customer to provide a considerable amount of details about the intended receiver of the payment including their bank name and account number etc. “It could be cumbersome at times and people would naturally shy away from a system where they have to go through a lot of steps and enter a lot of information just to make a payment. We need to make their life easier by making things simpler and absolutely convenient” said de Silva. In order to further simplify the payment process, they are in the process of implementing a centralized system where the account holder’s bank would be responsible to issue a “nickname” Payment Exchange NAME(PEN) to each of the irauthorized bank accounts. A customer merely needs to know the payment receivers mobile number and the PEN of the bank account to transfer the funds via their Smart mobile phone.
Lankaclear is also in the process of implementing the Central Bank’s recently announced Lanka QR code for the merchants end. “All a merchant would require is a Lanka QR code sticker pasted at his shop to accept a payment and a low cost mobile device to receive a SMS to indicate that the payment has been received. Even a king coconut seller would also be able to join the system with a simple Lanka QR code sticker and a simple mobile phone (feature phone) to receive SMS payment alerts. This is going to make things extremely simple for customers to make payments and it is going to revolutionize the entire payment landscape in the country. When we make the systems so simple to use, we anticipate that it will enable customers to pay a small scale grocery shop, corner laundry outlet or even easily make a payment to a domestic worker. We are very excited about the potential of the massive opportunity that is staring in the face of all our member banks.” said de Silva enthusiastically.
The advantage of this system is that it would provide ultimate convenience to busy individuals. De Silva is dreaming of a day where he would be able to order dinner after work from a small boutique food outlet and get the food delivered via a delivery service such as “Quickee” or “Grasshoppers” by the time he goes home without having to physically visit the shop. “I wouldn’t mind paying a small convenience fee for making my life easier, which would save me a lot of time and the hassle. Such opportunities would lead to further innovation, as apps can be created to coordinate between small retail shops and independent delivery services so that even a ‘Thosaikade’ would be able to deliver food to homes without having its own delivery channel.
Together with the member banks of LANKAPAYCEFTS, they have agreed to reduce the electronic fund transfer fees from the existing Rs. 50 to a nominal value to facilitate low value retail payments. “According to the new scheme, for payments up to Rs 1, 000, we intend to reduce the transaction fees charged by banks from customers to Rs. 1.” stated de Silva. For example, a Rs. 50 three wheeler charge would only become Rs. 51, but would bring in the added advantages of convenience and security in making payments. We anticipate that some of the merchants would absorb even these minimal customer fees to make it seamless to general public. A slab-based transaction fee system with a maximum cap of Rs. 10,000 per transaction has been introduced, with the consent of the Central Bank and participating banks, to take this concept to the masses.
This revolutionary initiativeis fast becoming the new norm in retail payments, which is bound to solve the common problems of the General Public via technology and harness the massive opportunity it presents. Already a number of innovative apps have gone live on Justpay, such as Upay, Ipay, Directpay, Orelpay, Dialog Genie and Sampathpay App etc. While Dialog ezcash and Mobitel mcash and Frimi are using Justpay payment mode to top up their payment wallets. Customers of Bank of Ceylon, Commercial Bank, Sampath Bank, People’s Bank, Cargills Bank, NTB, LOFC and Commercial Leasing & Finance are already using the above apps that are currently live. We are experiencing a month-onmonth growth of more than 60% in Justpay new registrations, which clearly indicates the acceptance of this payment mode among many segments of the population. Justpay has made it extremely convenient for customers to make payments and has already begun to revolutionize the entire retail payment landscape in the country.