Sri Lanka launches national QR adoption drive; scraps merchant fees for transactions under Rs.5,000

​Sri Lanka officially launched the National QR Payment Adoption Programme yesterday, introducing key measures to accelerate the country’s transition toward a less cash economy, including the complete removal of the merchant discount rate for all LankaQR transactions up to Rs.5,000. 

Implemented with immediate effect, the initiative also unlocks seamless person-to-person (P2P) transactions, allowing individuals to carry out digital fund transfers anywhere at any time without needing to visit a registered merchant.

​Spearheaded by the Digital Economy Ministry, Central Bank, GovTech and LankaPay, alongside the private financial institutions, the sweeping initiative aims to pull the country’s vast informal sector into the formal economy. 

Speaking at the launch event held at the Presidential Secretariat, President Anura Kumara Dissanayake emphasised that digitalisation remains a top government priority to establish a transparent, efficient and secure economic framework. 

He noted that the national target of building a US $ 15 billion digital economy is not merely about expanding the tech sector itself but rather injecting efficiency into agriculture and small and medium-scale enterprises, to drive the broader economic growth.

​Dissanayake highlighted that a robust digital transaction network is critical for effective state policy, particularly in identifying the beneficiaries for targeted relief. 

Citing the recent Rs.100 subsidy on diesel implemented amidst the global fuel price hikes, he explained that transparent transaction data is the only reliable metric to gauge an individual’s true economic footprint. 

This ensures that state support reaches the most vulnerable communities, rather than disproportionately benefiting heavy consumers.

​To achieve mass adoption, Dissanayake urged the banking sector to weave the new payment systems into the cultural fabric of Sri Lankan society. He pointed out that traditional cash exchanges, such as handing children money for school or offering cash gifts during the upcoming Sinhala and Tamil New Year, must seamlessly transition into QR-based formats. 

He stressed that unless the digital infrastructure accommodates these deep-rooted social practices and offers an attractive, convenient alternative to physical cash, public adoption would remain stagnant.

​Highlighting the scale of the challenge, Digital Economy Deputy Minister Eng. Eranga Weeraratne revealed that Rs.1.48 trillion in physical currency is currently circulating in the economy. Despite a highly digitalised banking system, where 89 percent of the adult population holds a bank account, an overwhelming 99 percent of retail trade is still conducted using physical cash. 

Weeraratne noted that in the final quarter of last year, only around 400,000 individuals utilised QR-based payments, prompting the government to plan large-scale awareness campaigns and lottery-based incentive schemes to drive immediate consumer and merchant onboarding.

​Central Bank Governor Dr. Nandalal Weerasinghe expressed optimism that the two newly introduced mechanisms would serve as a massive catalyst for digital financial inclusion. 

Acknowledging the Sri Lanka Banks’ Association and LankaPay for absorbing the transaction costs, he stated that the zero-fee structure for purchases under Rs.5,000 directly addresses the past adoption hurdles. 

Furthermore, Dr. Weerasinghe noted that enabling P2P transfers—where individuals can simply print and carry their own QR codes—replicates the successful digital payment models seen in markets like India, completely bypassing the need for physical cash in day-to-day interpersonal exchanges.