• :Central Bank says first stage was UPI, second stage is RuPay

Despite reports stating that the reason for the delay in the launch of RuPay card is the inability of Indian and Sri Lankan banks to come to an agreement on fee payments for transactions using the RuPay cards, implementation of RuPay card is not going to be long delayed even though there is no exact timeline for the launch of the card, the Central Bank of Sri Lanka told The Daily Morning Business.

The banking sector regulator stated that it had already gone ahead with discussions.

According to the Central Bank, the first stage of the implementation was successfully done when the Unified Payment Interface (UPI) was introduced in Sri Lanka, The Daily Morning Business learnt. Sri Lanka achieved the first stage of the Indian payment system introducing UPI along with Lanka QR and had not yet started second stage discussions on the fee payment of the Rupay card.   

Speaking to The Daily Morning Business,Central Bank of Sri Lanka (CBSL), Senior Deputy Governor, T.M.J.Y.P. Fernando said: “In the second stage of the Indian payment system, there has also been discussions on the use of the Rupay card, which is an ATM card. However, it's still only at the discussion stage and hasn't really advanced to the point where issues related to fee payment have been discussed.That kind of conversation hasn't happened because the central bank typically handles charge problems.”

Fernando pointed out that they have not yet received any formal requests or proposals regarding the fee payment from LankaPay. Initially, the National Payments Corporation of India (NCPI) and LankaPay will have their discussions, following which, they will draft a proposal and submit it to the central bank.

Speaking to The Daily Morning Business, Channa De Silva said, “Although we have launched UPI, there has been no agreement on MDR (Merchant Discount Rate) of the RuPay card. However, there is a technological mismatch because Sri Lankan and international cards adhere to the Europay, Mastercard, and Visa (EMV) standard, while Indian cards follow their own standards. Thus, we need to come up with a technical fix.”

MDR is the percentage that the banks charge for card transactions. This amount is given to the issuing bank and split between the issuer bank, the card scheme, and the acquirer bank. 

Indian media reports added: “talks on introduction of RuPay cards in Sri Lanka are facing some hurdles over the issue of commissions that banks charge for facilitating digital transactions using a branded payment system.”

According to government officials aware of the development, although there are no active engagements for RuPay technology for Sri Lanka through NIPL (NPCI International Payments Ltd) at this point of time, central banks on both sides are engaged to see that this service is also soon available in Sri Lanka, Mint reported.

Moreover, RuPay cards will support and make it easier for businesses in both countries India and Sri Lanka when visitors use the RuPay card for transactions. Further, enabling RuPay card users to shop and get cash withdrawals via ATMs will also bring a profit to both countries. ‘

According to TTG Asia, In 2024, 600,000 Indian tourists are expected to visit Sri Lanka, marking a record high from the country's top inbound travel source.

Compared to the 123,004 tourist arrivals from India that Sri Lanka registered in 2022, the 302,844 arrivals from India last year more than doubled. Up to now, 2018 has been Sri Lanka's best year for tourism in the Indian market, with 424,887 visitor arrivals.