Sri Lanka has introduced the Unique Payment Interface (UPI), a digital payment method widely used in India, to facilitate transactions for the increasing number of Indian tourists visiting the country and to promote formal banking, officials have announced.
The launch ceremony was attended by Indian Prime Minister Narendra Modi, Sri Lankan President Ranil Wickremesinghe, and Mauritius Prime Minister Pravind Jugnauth. The system allows Indians to make cashless payments in Colombo and Port Louis through UPI, using a smartphone to scan the Lanka QR code of any vendor.
Officials have identified 65,000 popular locations frequented by Indian tourists, with plans to enable 10,000 of these locations to accept UPI payments within the next three weeks. The remaining spots will be equipped with the system by March 31, 2024.
In 2023, Indian tourists made up a significant portion of the total foreign visitors to Sri Lanka, accounting for over 300,000 out of 1,487,303 arrivals. The UPI transactions will be capped at 200,000 Sri Lankan rupees per transaction.
LankaPay, a key player in digitalizing Sri Lanka’s banking and financial services sector, expressed optimism about the adoption of QR payments. The chairman noted that while QR systems are not yet widespread in Sri Lanka, partnerships with international entities, such as UPI, are expected to drive usage and popularity among merchants.
The UPI system allows Indian tourists to make payments using their smartphones, scanning the Lanka QR code, promoting a shift from informal income measures to formal income for merchants. However, at present, Sri Lankans visiting India cannot use the same facility, with plans to extend the service to them in the future.
During the launch, President Wickremesinghe highlighted the long-standing economic ties between Sri Lanka and India, expressing hope for continued connectivity and deepening relations. Indian Prime Minister Modi emphasized the role of UPI in uniting partners and spoke about the positive impact of technology on transparency, corruption reduction, and inclusivity in society.
Modi expressed confidence that UPI’s connection would benefit Sri Lanka and Mauritius, fostering digital transformation, positive economic changes, and promoting tourism. He anticipated that Indian tourists would prioritize destinations with UPI acceptance, and people of Indian origin in Sri Lanka and Mauritius, as well as students, would enjoy special benefits.
In collaboration with the Reserve Bank of India and the Central Bank of Sri Lanka, NPCI International Payments Limited of India and LankaPay have worked together to enable UPI acceptance through LankaQR. This collaboration is expected to streamline digital payments for Indian tourists in Sri Lanka.
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