Visa on driving digital payments growth in Sri Lanka for 2025

Visa Country Manager – Sri Lanka and Maldives Avanthi Colombage 

Sri Lanka, with its thriving industries in tourism, hospitality, and exports, stands poised for remarkable economic growth. A key enabler of this progress is the expansion of the digital payments sector, driven by the nation’s increasing embrace of technology and innovation. As a global leader in digital payments, Visa recognises Sri Lanka’s vast potential for further development. With high smartphone penetration and a surge in e-commerce activity, the country is well-positioned to advance its digital payments landscape. Visa Country Manager for Sri Lanka and the Maldives Avanthi Colombage shares her expert perspectives on the current state of digital payments, the challenges that lie ahead, and the immense opportunities for growth and adoption in the years to come.

Q: Visa has been highly invested in the digital transformation of Sri Lanka. What areas of digital payments have you focused on recently?

Visa has been deeply invested in driving Sri Lanka’s digital transformation, focusing on key areas of digital payments to support the nation’s evolving financial ecosystem.

Having served Sri Lanka for over 37 years, Visa has become an integral part of the country’s financial framework. Our purpose extends beyond business—we aim to uplift individuals, businesses, and communities, empowering economic participation and growth while being the best way to pay and be paid.

Following Sri Lanka’s recent recovery from its most significant economic crisis, sectors like tourism are flourishing with earnings of more than $ 3 billion last year1, creating opportunities for value-added services and influencing the evolving spending habits of consumers. These shifts highlight an increasing readiness for digital payment solutions, setting the stage for broader adoption and deeper integration across the economy.

Visa has been steadfast in its efforts to enhance card payment acceptance across Sri Lanka, ensuring foreign tourists can enjoy seamless and convenient transactions wherever they travel. One of our key focuses has been promoting tap-to-pay technology, a transformative innovation that eliminates the many hassles of cash and other payment methods and has seen significant adoption. Once shoppers experience its ease—particularly in scenarios like navigating long queues or avoiding the hassle of handling cash and loose change—they quickly recognise its speed and security as superior to traditional payment methods.

Additionally, we have collaborated with partners to introduce wearable devices, enabling Visa users to make contactless payments effortlessly with a simple tap of their wearables. This initiative aligns with our commitment to providing faster, safer, and more convenient payment options. Most recently, we relaunched our value proposition for Visa Infinite Cards in Sri Lanka, catering specifically to affluent customers. These premium cards offer an array of exclusive benefits across lifestyle, entertainment, retail, and travel, complemented by a 24/7 concierge service. This strategic initiative aims to tap into Asia’s burgeoning high net worth market, with Sri Lanka at its centre.

During high-spending seasons such as Christmas and New Year, Visa also focuses on consumer education, emphasising safe transaction practices and implementing robust safety measures to ensure secure payment experiences for all users.

Further, building on our commitment to making a positive social impact, Visa had partnered with Hatton National Bank this festive season to support hearing-impaired children. As part of the HNB Santa Brigade initiative, participants were invited to visit “HNBSantaBrigade.com” and channel their inner Santa Claus by saying “ho ho ho.” If their cheer reached the required decibel level, HNB and Visa donate a hearing aid to a child in need. This heartwarming initiative reflects the spirit of giving during the season of celebration, creating opportunities to bring joy and meaningful change to those who need it most.

Q:  How would Visa describe the current status of digital payments in Sri Lanka?

Sri Lanka’s digital payments ecosystem is rapidly evolving, with immense untapped potential across the country. Urban areas are at the forefront of this transformation, demonstrating a strong preference for tap-to-pay contactless payments, mobile wallets, and QR code transactions—all innovations that Visa has either pioneered or actively driven in partnership with local stakeholders. Encouragingly, regions beyond the Western Province are also embracing digital payment solutions at an impressive pace, signalling nationwide progress.

The growth trajectory for Sri Lanka’s digital payments market is unmistakably upward. Forecasts estimate a total transaction value of $ 9.98 billion in 2024, with an anticipated compound annual growth rate (CAGR) of 14.49%, projected to exceed $ 17 billion by 2028. Visa is proud to serve as a catalyst in this expansion, enabling greater accessibility and innovation in the payments landscape.

This momentum is evident in consumer behaviour, with Visa witnessing a 35% surge in debit card usage during the last Avurudu (New Year) season. Notably, in-store spending by Visa cardholders was seven times greater than e-commerce spending in 2023, highlighting evolving payment preferences.

Studies also position Sri Lanka, alongside nations like Vietnam and the Philippines, as a key driver of the next wave of digital payments in the region, further underscoring the country’s transformative potential in the global digital economy.

Q:  As a network that is at a vantage point of seeing commerce in terms of consumers and businesses, what factors suggest significant growth potential for digital payments in Sri Lanka?

Sri Lanka has significant potential to transition from cash to digital payments, with less than 25% of personal consumption expenditures currently managed digitally. At Visa, our initiatives focus on advancing digital adoption, fostering financial inclusion, and supporting entrepreneurial growth, all aimed at accelerating the country’s journey toward becoming a digitally empowered economy.

Beyond individual consumers, the backbone of any formal economy lies in its MSMEs, which hold immense potential for digitisation. Sri Lanka’s SME sector comprises over 1 million businesses, contributing 52% to the GDP and accounting for 45% of employment2. This represents a vast opportunity to displace cash transactions and digitise a significant portion of the nation’s commerce.

At the merchant level, the cost of handling cash in the South Asian region is estimated to be around 14%, a burden that can be significantly reduced by digitising small businesses. This transformation can begin with accepting cards and other digital payments and evolve to include automated reconciliation, use of corporate credit cards, and digitised processes for salaries, supplier payments, and more.

As a global leader in digital payments, Visa is committed to empowering small businesses with greater access to digital commerce, improved credit availability, and enhanced trust and transparency—all while reducing costs. These efforts are designed to ensure small businesses thrive in a modern, digitised economy.

Q:  What role does cybersecurity play in unlocking this potential?

 Cybersecurity lies at the heart of building trust in digital payments. For both consumers and businesses, the assurance of secure data and money is paramount, directly influencing the adoption of digital payment solutions. In an era where cybercriminals leverage sophisticated tools like artificial intelligence (AI), machine learning (ML), and social engineering to exploit vulnerabilities, the need for robust defenses has never been greater. Visa champions a multi-pronged approach to tackle these threats, partnering with industry bodies, universities, supporting government initiatives for cybersecurity training, and fostering collaboration across the financial ecosystem and beyond.

As a global network of networks, Visa assumes the critical responsibility of safeguarding the payments ecosystem. We proactively work with partners, clients, and governments worldwide to anticipate and mitigate cyber threats. Our flagship tools—Visa Advanced Authorization (VAA) and Visa Risk Manager (VRM)—provide issuers with integrated, end-to-end fraud management capabilities, functioning effectively either independently or together.

For over three decades, Visa has harnessed the power of AI, machine learning, and deep learning to make payments more secure, intelligent, and seamless. Our cutting-edge fraud prevention solutions save an estimated $40 billion annually for customers worldwide. With an investment of $11 billion in technology over the past five years and a dedicated team of over 1,000 cybersecurity experts, Visa continues to set benchmarks in network security. Through innovations like tokenisation, AI-driven fraud detection, and multi-factor authentication, Visa ensures every transaction is secure with multiple layers of fraud protection. Locally, we partner with banks, fintechs, and businesses to bolster cybersecurity frameworks and raise public awareness about secure payment practices. Together, these efforts exemplify Visa’s unwavering commitment to securing the future of digital payments for all.

Q:  What does Visa see happening in digital payments in Sri Lanka in 2025?

In Sri Lanka, 72% of the population uses smartphones to access the internet , with rural areas surpassing urban cities. Smartphone usage is particularly prominent among middle-aged individuals and youth, and the highest computer literacy rate is observed in the 20-24 age group—all indicators of the country’s vast digital potential.

However, digital literacy outside the Western Province remains limited, posing a challenge for the expansion of digital payments. To foster growth here, Sri Lanka must strengthen its digital payment infrastructure, offering a range of options such as cards, contactless payments, QR codes, and e-commerce solutions. This would not only drive speedy adoption of digital payments but also enhance the country’s tourism potential.

As tourism continues to be a key focus for the nation, the modern traveller’s preference for experiential travel demands widespread, seamless, and secure payment systems. With the government’s ambitious goal of attracting five million tourists by 2029 and generating $ 21.6 billion by 20304, increasing tourism spending to $ 4,000 per visitor is crucial.

Our commitment to creating a less-cash society must remain steadfast, ensuring both safety and convenience for consumers. For tourists, the ability to pay in local currency, along with access to exclusive offers, will enhance their travel experience and further solidify Sri Lanka’s appeal as a global tourism destination.

Q:  How will Visa continue contributing to Sri Lanka’s economic growth?

At Visa, we are committed to driving innovation that delivers lasting benefits to the payments landscape. Our investments span a range of cutting-edge technologies, from wearable devices that enable tap-and-pay functionality to the instant issuance of virtual cards through mobile apps, and enhanced experiences for corporate travel cards. These innovations cater to tech-savvy consumers and businesses that are increasingly digital-first.

Visa has played a pivotal role in shaping Sri Lanka’s digital payment ecosystem through strategic partnerships that promote financial inclusion and stimulate growth across diverse sectors. Our introduction of forward-thinking payment technologies, such as contactless payments and digital wallets, has not only revolutionised how we pay but is also aligned with broader economic objectives—boosting tourism, fostering SME development, and advancing economic inclusion. In doing so, we aim to contribute to Sri Lanka’s overall socioeconomic growth.

We remain steadfast in our commitment to accelerating Sri Lanka’s digital transformation in the years ahead, empowering both businesses and consumers to embrace a more connected, efficient, and secure future.

Footnotes:

1https://www.uniindia.com/sri-lanka-tourism-income-soars-over-53-pct-in-2024/world/news/3364993.html

2https://www.adb.org/publications/catalyzing-sme-venture-capital-sri-lanka

3Smartphone use drives SL digital literacy – Daily FT

4https://www.lankabusinessonline.com/sri-lankas-tourism-poised-for-remarkable-growth-as-visa-free-travel-enhances-industry-potential/