HNB introduces Zero MDR for LankaQR, empowering merchants nationwide

HNB – Head of Digital Banking/Senior Vice President Chammika Weerasinghe, Central Bank of Sri Lanka – Director, Payments and Settlements Vasantha Alwis, HNB – Managing Director/CEO Damith Pallewatte, HNB – Chief Operating Officer Sanjay Wijemanne, and LankaPay – CEO Channa de Silva, present a symbolic tonic officially announcing 0% merchant commission for digital transactions via HNB SOLO, reinforcing efforts to drive digital payment adoption in Sri Lanka

In a strategic move to promote cashless transactions, HNB has announced the elimination of Merchant Discount Rates (MDR) for LANKAQR transactions among HNB appointed merchants who are enabled to accept LANKAQR payments. 

The event organised to announce this initiative was held at HNB towers with the participation of Central Bank of Sri Lanka Director, Payments and Settlements Vasantha Alwis, HNB Managing Director/CEO Damith Pallewatte, HNB – Chief Operating Officer Sanjay Wijemanne, and LankaPay CEO Channa de Silva recently with the aims to make digital payments more accessible and cost-effective for businesses across Sri Lanka.

Taking a leap into digitalising the retail payment space, Central Bank of Sri Lanka (CBSL) together with LankaPay launched LANKAQR in 2020 as a convenient, secure and low-cost alternative for merchant payments with the objective of simplifying digital transactions and promoting financial inclusivity. LANKAQR is an interoperable quick response code which complies with EMVCO international standards which enables a customer to scan and pay at LANKAQR merchants using any LankaQR enabled mobile app. Currently there are 22 LANKAQR merchant acquirers and 30 LANKAQR enabled mobile apps operating in the country. By Q3 2024, there were over 410,000 LANKAQR merchants island wide.

This initiative is being introduced by HNB in a timely manner specifically targeting the start of the Avurudu season will be initially valid for three months from 1 April to 30 June 2025 to encourage digital transactions during a period of increased footfall and transaction volume. By eliminating cash handling, both merchants and customers benefit from a seamless and convenient payment experience.

The LankaPay integration with India’s Unified Payments Interface (UPI), China’s UnionPay, and Alipay enables seamless cross-border transactions, benefiting both local businesses and international visitors. This integration allows UPI, UnionPay, and Alipay-enabled app users, particularly Indian and Chinese tourists visiting Sri Lanka, to make payments through these digital apps at Sri Lankan merchant points, especially in tourist hotspots across the country. It also encourages local merchants to adopt digital payment methods, enabling them to attract higher volumes of business from these digitally savvy customers, who are accustomed to high digital payment adoption in their home countries.

Merchants can accept payments via static and dynamic QR codes with real-time settlements, enhanced security, and zero processing fees. The 0% MDR offer from HNB is applicable only for transactions below Rs. 10,000. Transactions exceeding this amount will continue to incur standard MDR charges.

HNB encourages businesses to register to accept LANKAQR payments to take advantage of this cost-free payment solution and contribute to the growth of digital transactions across Sri Lanka.