Central Bank promotes cashless transactions

[RanaTop contributor]

http://www.srilankamirror.com/news/item/11876-central-bank-promotes-cashless-transactions

Sri Lankan Government's plan to encourage higher use of debit and credit cards by the people than cash is gaining momentum with several finance companies have applied to get Central Bank licence to issue cards deviating from the main mode of financial transaction in the country.

At-least one finance company, Singer Finance has already received the green light from the Central Bank to issue credit cards and a few others will follow suite, Central Bank sources said

The country should move towards plastic money and payment gateways as the developed world has already moved towards this end, Central Bank sources said adding that as the financial regulator of the country its responsibility is to create awareness and popularise the using of credit and debit cards among the people.

It is also aimed at curbing circulation of black money and on the other hand plastic money is easy to use and it also secured payment.

Cash is used by consumers in most of the transactions by Sri lankans , but with contactless payments growing amount of fraud on contactless transactions is declining to some extent , CB sources said.

The Central Bank has published an advertisement in newspapers recently promoting the use of payment cards for financial transactions as it avoids the inconvenience of carrying cash fear of cash being stolen and hassle of using currency notes.

Cheques are the most popular non-cash retail payment instrument in Sri Lanka which accounted for 75.3 per cent of the value of total non cash re tail payments in the first quarter of 2016.

Payments and Settlements Department of Central Bank highlighted in its advertisement that 16 million payment cards are currently in use by the people and 60 million transactions take place annually.

According to Central Bank data there were around 14.7 million debit cards and 1.3 million credit cards issued by banks and licensed financial institutions in the country.

Around 2.8 million debit cards and 200000 credit cards were issued to people last year while 756896 debits cards and 44557credit cards had been issued during the first quarter of this year Central Bank data revealed.

The Central Bank also promotes card transactions instead of cash to Increase tax revenues and curbing money laundering, an economic expert said adding that encouraging plastic money would also increase the Central Bank’s capability to monitor illegal transactions.

This will help banks to motivate customers to go digital with their financial transactions, he pointed out.