People’s Bank first to partner with LankaPay as acquirer and issuer for National Card Scheme

From left: LankaClear Manager Business Development Sashika Kaushalya, Consultant to JCB International (for Sri Lanka) Lakshman Liyanage; LankaClear DGM Finance Rasika Galappaththy; GM/ CEO Channa de Silva, Peoples Bank CEO/GM Ranjith Kodituwakku, Senior Deputy General Manager (Payment and Digital) K. B. Rajapakse; and Head of Cards Jayanath Dias

In a noteworthy effort to help Sri Lanka’s economy by saving valuable foreign exchange, Peoples’ Bank in yet another important national initiative, partnered with LankaClear to issue and acquire payment cards under the National Card Scheme (NCS).

Thus, People’s Bank became the first bank in the country to join this initiative as both an acquirer and an issuer.

NCS was introduced in 2017, under the guidance and approval of the Central Bank, with the objective of issuing a globally accepted local payment card as a cost-effective alternative to the current International Card Schemes operating in the country. LankaClear’s quest as the operator of the country’s national payment network – LankaPay has been to minimise the cost structure within the financial sector through a common infrastructure thereby reducing the cost to the banks, customers and the country as a whole.

The LankaPay/JCB cards issued under the NCS will route all domestic transactions locally and only overseas transactions will be routed via the JCB network, an International Card Scheme based in Japan, which is a member of the EMVCo. (EMV is a registered trademark in the US and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo, LLC). 

This initiative will ensure that no foreign exchange outflow takes place for any local transaction unlike in the case of using other international card schemes. This could potentially save the country a large amount of foreign exchange for local transactions from the use of debit/credit cards issued under other international card schemes.

As a result of this initiative, over 4,000 of merchants of People’s Bank across the country will be able to accept LankaPay/JCB co-branded cards in their POS terminals. Domestic usage of these cards will bring down the current merchant commission (MDR) of around 3% to a much lower 1%, which will make card transactions more acceptable to the merchants. This benefit is expected to be passed down to the customers as most merchants currently add this commission to the value of the good, which has been a primary reason for slow penetration of card payments in the country.

Furthermore, People’s Bank is ready to commence issuing LankaPay/JCB co-branded cards to their customers. While cardholders are likely to benefit from reduced merchant discount rates, they will also enjoy 50% reduction in the applicable charges for interbank ATM cash withdrawal via this card.

Commenting on the bank’s achievement, People’s Bank CEO/GM Ranjith Kodituwakku stated, “As the country’s leading digital banking service provider People’s Bank remains committed to pioneer any technological innovation for the betterment of the country and the customers. We are especially delighted to be a part of this initiative which saves valuable foreign exchange for the nation in this hour of need as a nation minded organisation.”

Welcoming People’s Bank aboard, LankaClear GM/CEO Channa de Silva stated, “We are delighted to welcome People’s Bank to this national initiative, which marks an important milestone in this journey that began in 2017. Being one of country’s pioneering state banks, which has its footprint in every nook and corner of the country, our partnership with People’s Bank has given this effort a renewed impetus. From a macro point of view, billions of rupees are currently taken out of the country every year for using other international card schemes. This initiative will help curtail this foreign exchange outflow for local transactions while bringing greater autonomy to the country’s financial sector. We believe that this will be of great importance to our country at a time where there is significant reduction in the foreign exchange inflow due to the pandemic, which will help to stabilise the country’s economy.”

A unique feature of this card is the two-in-one capability where there is a stored value element in addition to debit/credit feature. Based on this card, the Central Bank and Ministry of Transport is about to launch the Sri Lanka Transit Card to be used in public transport as a prepaid top-up card. People’s Bank has been an integral part of this national endeavour from its inception in addition to Sri Lanka Transport Board and National Transport Commission.

Peoples’ Bank has the largest customer base of 14 million customers in the country and also the largest branch network of 741 physical contact points to serve them. The bank also provides its services 24 hours a day, 7 days a week and 365 days a year via its Self-Banking Units amounting over 250 across the island. The bank also has played a pivotal role in taking digital banking benefits to the masses and thereby has positioned itself as the leading digital banking service provider in the country.