Supporting Sri Lanka in post-pandemic recovery – A Mastercard perspective

Friday, 4 September 2020 00:00 -     - {{hitsCtrl.values.hits}}

By Rajesh Mani

The COVID-19 pandemic, which continues to wreak havoc across much of the world, has left millions infected and caused far reaching disruptions to everyone’s lives. Restrictions put in place to slow the spread of the virus have caused significant disruptions to economic growth, the full repercussions of which are still unknown. While the immediate future does look uncertain, I am confident that the resilience of the human spirit will persevere. This is being seen daily around the world in the actions of country leaders, medical professionals, and even ordinary citizens.

This spirit is exemplified in the case of Sri Lanka. This island paradise has faced many challenges over the years. Just last year, it had to deal with the Easter Sunday bombings. 2020 brought with it the COVID-19 pandemic. Despite these setbacks the country is committed to achieving economic prosperity and has also acted swiftly and decisively to protect its populace.

To begin with, the way Sri Lanka has set about supporting affected businesses is impressive. Instead of simply handing out sums of cash, the government introduced an Economic Stimulus Package comprising moratoriums on loan repayments, permanent overdraft and trade finance facilities, working capital loans, reduced interest rates and several other measures that would spur growth, not just recovery. Just recently, the Central Bank of Sri Lanka announced that as of 18 August, bank funding for COVID-19 affected businesses has topped the Rs. 100 billion mark.

While all businesses would be able to avail the benefits of these measures, SMEs would have the additional challenge of balancing the needs of the owner and the business. At Mastercard, we recognise this and have been working with governments across the world in helping the SME segment, especially during times of economic difficulty. In May this year, Mastercard expanded its worldwide commitment to financial inclusion by pledging to bring a total of one billion people and 50 million micro and small businesses into the digital economy by 2025. 

In Turkey, Mastercard has helped the government shift the loans they were offering SMEs to a digital format. Moving from cash payments to cards allowed the authorities to gain greater visibility into how it was being spent and offer ongoing guidance and support. Expanding our engagement with the Government of Sri Lanka and other stakeholders to better comprehend local challenges related to SMEs and share our learnings from around the world, we look forward to working with them on developing similar solutions for this market.

Additionally, given that the island nation has been an early adopter of digital payment technologies, I believe accelerating adoption should be relatively smoother here and the benefits accruing would be manifold. While banks and financial service providers have continued to drive cards and other forms of digital payments, the Central Bank of Sri Lanka too has been actively driving the adoption of digital payments. In its digital roadmap for 2020, the Central Bank is focusing heavily on moving the country towards a ‘less-cash’ society. The recent lockdowns too saw a sharp upward spike in the number of digital transactions performed, with consumers and businesses keen on going digital.

The vision of the Government and the Central Bank around digital payments is truly inspiring. With relatively higher levels of adoption, we are excited to work with all stakeholders on taking the benefits of digital payments to more consumers and businesses around the island.

Mastercard also has an active partnership with government owned utility bodies to encourage consumers and businesses to use digital payments in Sri Lanka. We are also engaging with banks, non-banking financial institutions, mobile networks, FinTechs and merchants to introduce digital solutions relevant to this market. 

This includes powering simpler QR payments through Mastercard QR, enabling cross-border, person-to-person money transfers with Mastercard Send, enabling simpler yet stronger authentication with Mastercard Identity Check, and enabling more SMEs to go online with Mastercard Payment Gateway Services (MPGS) and Simplify Commerce. Building on the country’s strong foundation in digital payments, we are committed to partnering with all stakeholders on driving adoption further.

Tourism has been earmarked as one of the key sectors to drive the country’s economic growth. The onset of COVID-19 has impacted these plans and a quick revival of the tourism sector will be crucial to help the country’s economy recover. Safety is now the number one priority for visitors and cities will have to adapt. Mastercard has been working with the Sri Lanka Tourism Promotion Bureau since 2018 to promote the country as a preferred destination. Earlier this year, Sri Lanka became the first destination in South Asia to be added to Mastercard’s Priceless Cities program, a carefully curated list of destinations that offer exclusive experiences that money can’t buy.

Mastercard is also connecting cities around the world with academia and businesses to identify common challenges that can be best addressed through collaboration through its City Possible program. Over 30 cities including Los Angeles, Dublin, Athens, Dubai and Melbourne are leading the charge to drive inclusion around the world as part of this unique global network for urban co-development. Serving as a trusted partner, we are committed working with all stakeholders on getting Sri Lankan cities too onboard such programs and helping this Pearl of the Indian Ocean realise its fullest potential.

Thus, we see great potential for technology and digital payments to serve as a key catalyst for economic recovery and growth in Sri Lanka. We look forward to working together with the Government and all other stakeholders on enabling this great nation to rise above all challenges and emerge stronger from this global health and financial crisis.

(Rajesh Mani is the Mastercard Country Manager for Sri Lanka and Maldives and brings with him over two decades of experience in the payments and fintech sectors. Rajesh has been with Mastercard for over six years, in both in-market as well as regional roles.)