Govt. waives QR payment fees for small merchants in push towards cash-lite economy

Monday, 6 April 2026 05:23 - - {{hitsCtrl.values.hits}}

The Government has removed transaction fees on low-value QR payments in a bid to accelerate digital adoption, as policymakers intensify efforts to shift the economy away from cash dependence.

With effect from today (6), the Merchant Discount Rate (MDR) on all LankaQR transactions up to Rs. 5,000 has been fully waived, allowing small-scale merchants to accept digital payments at no additional cost.

The move coincides with the launch of the ‘National QR Payment Promotion Program’ today under the patronage of President Anura Kumara Dissanayake, marking a renewed push to deepen financial digitisation.

The initiative is aimed at steering Sri Lanka towards a cash-lite economy by reducing reliance on physical currency while promoting faster, more transparent payment systems. The removal of the MDR is expected to address a key barrier to adoption among micro and small businesses, where transaction costs have historically discouraged the use of digital platforms.

Sri Lanka already has relatively high financial inclusion, with around 89% of adults having access to banking services. The Common Electronic Fund Transfer Switch (CEFTS) network processes roughly 68 million transactions each quarter, amounting to Rs. 6.3 trillion in value. LankaQR, supported by over 20 financial institutions, is accepted by around 450,000 merchant locations across the country.

Despite this infrastructure, digital payment usage remains limited. Currency in circulation stands at Rs. 1.48 trillion, while LankaQR transactions averaged only about Rs. 395,000 per month as of the third quarter of 2025, highlighting a significant gap between capacity and actual usage.

To address this, authorities are rolling out a series of behavioural incentives alongside the fee waiver. A countrywide raffle program will reward both consumers and merchants using QR payments, with prizes of up to Rs. 1 million awarded on a weekly and monthly basis. A trilingual promotional campaign will also be launched to drive awareness across all regions.

In addition, a ‘Social Visibility Index’ covering all 25 districts has been introduced to monitor adoption levels and ensure transparency in implementation.

The longer-term goal is not only technological modernisation, but also the creation of a more inclusive financial ecosystem, where digital transactions become the default across income groups and geographies, strengthening efficiency, traceability, and economic resilience.