Visa sees over 35% surge in debit card spends; trend expected to continue in Avurudu season

• Out of the total domestic spends on debit cards, the share of in-store spending is 7 times that of e-commerce.
• Last holiday season saw over 20% growth in Visa debit transactions vis-à-vis 2022.

Visa, the global leader in digital payments, this week announced that Visa debit card spends saw a significant increase of over 35% in the past year, indicating healthy growth of digital payments in Sri Lanka. This increase is buoyed by a 30%+ increase in face-to-face spends and over 40% increase in e-commerce spends. As the Tamil and Sinhala New Year celebrations commence in the country, retail transactions are picking up with more active shoppers during the festive period. Consumers are increasingly paying by debit card, opting for safer, simpler, and more convenient transactions. 

Visa Country Manager – Sri Lanka and Maldives, Avanthi Colombage, said: “We are excited to see the jump in debit card usage by consumers in Sri Lanka lately. While this is skewed towards in-store spends, e-commerce growth too has been heartening, and we expect this momentum to continue during the Sinhala and Tamil New Year. We also saw a robust over 35% growth in debit spends in 2023 over 2022, in the year-ending holiday season. This festive season too, we believe cardholders will gravitate towards secure and faster ways to pay like tapping or dipping their cards. We have also been working closely with our issuing and acquiring partners to boost card usage and its acceptance so that consumers can use their Visa cards anytime anywhere – conveniently, easily, and safely.” 

Recent data by Visa Consulting and Analytics shows that Visa debit cards have largely been used at face-to-face or ‘in-store’ channels like merchant outlets and shops. The proportion of in-store spend of the overall domestic debit card usage is 7 times that of what is spent on e-commerce. The top in-store categories where consumers shopped have been Food and Grocery, Apparel, Fuel, and Restaurants. E-commerce spending was mostly for telecom and utility services, education, government payments, and insurance.

 “This indicates the rising usage of debit cards, one of the most familiar, simple, and quick ways to pay digitally. Geographically, we saw urban centres such as Colombo and Gampaha recording over 50% of in-store transactions. We are working with partners to create regional roadshows beyond the Western Province to increase awareness of debit cards among consumers and merchants,” Colombage added. 

This increase in debit card usage among Sri Lankans is seen in many developing countries as more consumers are opting for a seamless and secure payment experience with cards vis-à-vis using cash. With the promising growth in tourism as well, digital transactions by tourists also played an important role in increased spending. Compared to 2022, Visa data shows that the share of tourism in total cross-border spends during the holiday season grew by 15 percentage points. In terms of volume and value both, tourism-related spends have increased by over 100% on Visa credentials,” confirms Colombage.

 Visa further shared that over 50% of tourism-related spends in Sri Lanka came from the USA, India, UK, UAE, and Australia. Tourists have spent largely on lodging and retail goods, which contributed to over 60% of tourism spending during the holiday season. “We are committed towards raising awareness of the benefits of using debit cards for safety and ease of use,” said Colombage. Visa has tied up with its clients and conducted awareness initiatives for merchants on debit cards, as well as promotional activities, cashback offers, and discounts for Visa cardholders. It is also focusing on increasing the acceptance of Visa cards and digital transactions across Sri Lanka.