Sri Lanka removes merchant fees on small QR payments to encourage cashless transactions and support small vendors, targeting its high cash circulation.
COLOMBO: Sri Lanka has launched a major initiative to drive digital payments by eliminating transaction fees for merchants using its national QR code system.
President Anura Kumara Dissanayake inaugurated the National QR Payment Promotion Programme, which immediately removes the Merchant Discount Rate on LankaQR transactions up to 5,000 Sri Lankan rupees (US$15.87).
This policy is designed to encourage small-scale vendors to adopt digital payments without incurring any cost.
The government’s push addresses the persistent dominance of cash in daily transactions despite available digital infrastructure.
Currency in circulation remains high at 1.48 trillion rupees (US$4.68 billion), while LankaQR usage averages a modest 395 million rupees (US$1.25 million) per month.
By contrast, other digital channels like the Common Electronic Fund Transfer Switch process about 68 million transactions per quarter, valued at Rs. 6.3 trillion (US$19.9 billion).
The LankaQR system is already supported by over 20 financial institutions and is accepted at roughly 450,000 merchant locations across the country.
Officials hope the fee waiver will significantly increase adoption and reduce the economy’s reliance on physical cash.