To fulfil the daunting task of driving towards a less cash Sri Lanka, LankaClear is spearheading the effort as the enabler on behalf of the Central Bank of Sri Lanka (CBSL). Its main role is to ensure that transactions could be carried out seamlessly among the financial institutions. 

LankaClear, as the operator of Sri Lanka’s National Payment Network – LankaPay, has been in the forefront in revolutionising the country’s Banking and Financial services industry by keeping the elements ‘innovation’ and advanced ‘technology’ at its core. A few of the key services offered via the LankaPay network are JustPay, Lanka QR, National Card Scheme, Sri Lanka Interbank Payment System, Common ATM Switch, Common Electronic Fund Transfer Switch, Cheque Imaging & Truncation System and Common POS Switch.

ICT industry veteran Channa de Silva is the General Manager/ Chief Executive Officer of LankaClear, a role he took over five years ago. He counts nearly 30 years of experience encompassing a spectrum of industries and has served in several leading multinational and local organisations. He has been the driving force behind the innovative payment solutions introduced by the company in the recent past and is primarily responsible for the phenomenal growth achieved in terms of promoting electronic payments.

Channa went down in history as Sri Lanka’s first ever webmaster with the development of Sri Lanka’s first commercial web site (1994) and he was also the engineer responsible for the establishment of the first ever dedicated Internet connection to Sri Lanka back in 1995. Some of the key achievements under his leadership include the first online newspaper in the South Asia region (Daily News in 1995); first radio station on-line (TNL Radio in 1996) and first ever Wi-Fi network in the country while he subsequently became the CEO of the company.

Prior to joining LankaClear, he was responsible for developing IBM software implementation in Sri Lanka during his tenure as the DGM – Software Group of IBM and was orchestral in introducing IBM’s software universe to the country. Channa also served as the Director – Enterprise Business and Public Sector at Microsoft Sri Lanka where he led the business through an unprecedented growth. His outstanding achievements were acknowledged numerous times by Microsoft where he was singled out for Microsoft Gold Club Excellence Award for exceptional performance and the Microsoft Share Fighter Champion for winning against competition. He was also a member of the local language workgroup of Sri Lanka and played a pivotal role in ensuring that a Language Interface Pack was built in Sinhala and Tamil for Microsoft Windows and Microsoft Office in 2007.

Apart from obtaining his BSc. (Honours) and MSc. in Electrical and Computer Engineering from the State University of New York, USA specialised in Data Communication, Channa also holds a MBA from the Postgraduate Institute of Management (PIM) Sri Lanka and is a distinguished member of the IEEE (USA), Tau Beta Pai (USA), Eta Kappa Nu (USA) and Golden Key (USA) for academic excellence.

Moreover, he is also a member of the National Payment Council of CBSL and is also the Chairman of the Marketing Committee appointed by the CBSL to Promote Digital Payment Products consisting of marketing heads of all licenced commercial banks. He is also a Board member of Sri Lanka CERT | CC, which is the primary organization responsible for Cyber Security in Sri Lanka. 

A digital economy is a main driver of innovation, competitiveness and growth, and it holds huge potential for entrepreneurs and SMEs. It also benefits the economy of a country as maintaining cash costs approximately 1.5% of the GDP of the country, which could be redirected elsewhere such as towards welfare payments or education.

“However, we have to overcome many challenges to enable a digital economy,” Channa stated. “Prior to COVID-19, the biggest challenge we faced was getting people away from cash and adopt digital payments. While the enabling technology was available, many people were reluctant to use them. In terms of banks, the technology available in banks varies significantly from one to the other, so it takes a lot of time to rollout common services.

“A major challenge in pursuing retailers to accept digital payments was the requirement of a ‘point of sale terminal’ to accept card payments, which was expensive. Therefore, we wanted a cost-effective system for them rather than using a POS terminal to accept the payments. This is where we introduced Lanka QR together with CBSL, where all a merchant needs is to paste a sticker at the shop and any customer with a smartphone can scan it to make payments. There is no cost to be borne by the merchant.

“The whole economy must be digitised, if not, the purpose of enabling digital payments will not be served. If only a few merchants are onboard, the end-to-end payment chain will be broken at a particular point. Therefore, we will continue to pursue all merchants including the bottom of the pyramid and micro merchants to bring them onboard.”

The industry expert further states that “people will start adapting to a digital economy only once they see the convenience and benefits it brings, therefore awareness programmes are a must. ‘Cash Wade’, which is a campaign initiated in partnership with CBSL and IFC, is one such major awareness initiative.”

“There was a showstopper to increase card payments until recently because banks used to charge a significant commission from merchants. Even if the customers wanted to make card payments, the retailers were reluctant to accept them because of the large commissions they had to bear.”

“Due to this, a key issue facing SME merchants who dealt primarily in cash was that the cash earned was expended for daily activities and thus was never deposited in a bank. As a result, they had difficulty in securing loans for business growth since they could not justify their income to banks. Only option left for them was to obtain loans from ‘loan sharks’ at exorbitant interest rates.”

Speaking of how digital payments can help during a pandemic Channa said, “Almost 50% of the mobile phones in Sri Lanka are smartphones, thus, we felt that enabling in-app payments via smartphones was the way forward. Consumers could make purchases or perform any transactions safely from the convenience of their homes. We introduced JustPay to support in-app payments where people can now sign up and make payments through any Fintech app by simply registering with their own bank account. Especially during curfew and travel restrictions, this was a life saver.”

A main aim of LankaClear is financial inclusivity, which is taking digital financial services to rural areas. This is crucial as almost 82% of the population in Sri Lanka lives in rural areas. “The facility to withdraw money from any ATM has helped most people in rural areas as now they do not have to travel far to an ATM of their own bank. Furthermore, covering a significant portion of the population who uses smartphones in Sri Lanka, we introduced a system called ‘Payment Exchange Name’ where people in rural areas can now receive funds electronically to their bank accounts by simply providing their mobile number and a nickname. Introduction of Lanka QR was also for this purpose.

In conclusion, the CEO stated that “Currently we are losing billions in foreign exchange to carry out local payment transactions due to transaction fees of international card schemes. To address this problem, LankaClear introduced the national card scheme. Under this, a globally recognised debit/credit card was launched with the backing of CBSL. We encourage the general population to switch to this card because it will help us to retain valuable foreign exchange for any local transaction within the country.”

LankaClear will continue to innovate and drive the nation towards a digital economy, which will have significant benefits to the country and the entire population. Their focus will be to popularise these services in every corner of the country. They invite everybody to get on board the digital economy bandwagon and help them to take the country towards a less cash society.