LankaClear facilitates progressive, efficient payment systems infrastructure

LankaClear (Pvt) Ltd. (LCPL), Sri Lanka’s premier catalyst for facilitating progressive payment systems infrastructure, has over the years introduced numerous advanced infrastructure systems to the country’s financial landscape. 

The Sri Lanka Interbank Payment System (SLIPS) is one such technology that transformed the banking landscape, introducing new and enhanced levels of efficiency, security and cost effectiveness to the interbank fund transfer system. 

SLIPS is an online interbank electronic fund transfer system which eliminates the need for paper work in the fund transfer process.  Catering mainly for low-value retail payments – up to Rs. 5 million, the system enables the electronic movement of funds from one account to another without the corresponding physical documentation. 

The system therefore enables increased levels of security by eliminating the physical movement of paper documentation, faster transfer times and lower infrastructure requirements, ensuring greater revenue generating capabilities, operational efficiencies and cost savings to banking institutions and customers, says the company’s CEO Sunimal Weerasooriya.  

Using SLIPS for payment and recovery of payments will bring tangible benefits to customers.  These include payments being realised on the same day subject to certain conditions and low cost compared to other interbank paper based payment systems, ease of initiating the transaction and extended windows for submission of transactions.

Further explaining the SLIPS process, he said that all participating financial institutions are connected to LCPL through a Virtual Private Network (VPN).  The participant can submit multiple outward payment files to LCPL before the two cut-off times of the day, which are either at 12 noon or 6 p.m.  Inward payment data corresponding to the above mentioned outward payment files can be downloaded by the banks by 2.30 p.m. or 8 p.m. on the same day. Credit Transactions (except salary payments) submitted to LCPL before the 12 noon cut-off time will be realised on the same day.

The highest level of security is achieved in this online EFT payments system by means of digitally signing the SLIPS transactions and IPSec encryption on the LCPL VPN. The Digital Certificates used for digitally signing the SLIPS transactions are provided for the banks by LankaSign, Sri Lanka’s financial sector Certification Service Provider, operated by LCPL.

The volume of transactions through SLIPS grew by a significant 32% from the financial year 2009/10 to 2010/11 whereas the value of transaction grew by 19% during the same period. The total value of transaction cleared through SLIPS during the financial year 2010/11 was Rs. 346 billion.

SLIPS is currently more commonly used for salary payments, pension payments, customer account to account fund transfers, standing orders, insurance payments, credit cards settlements, dividend payments and IPO refunds.

By popularising the transactions through SLIPS, LCPL hopes to actively encourage a move towards paperless transactions in line with the progress in this direction being made by more developed economies.