By: Staff Writer
December 27, Colombo (LNW): Sri Lanka’s public sector must embrace digitalization to unlock its economic potential, urged WSO2 Founder and CEO Sanjiva Weerawarana during a Central Bank lecture on “Unleashing the Digital Economy in Sri Lanka.”
Highlighting the inefficiencies in the current system, Weerawarana called for radical reforms, including capping cash transactions at Rs. 2.5 lakhs and phasing out Rs. 5,000 notes to foster transparency and drive digital adoption.
While Sri Lanka boasts high National ID and birth certificate coverage, efforts to implement a robust digital identity system have stagnated for over two decades. Weerawarana criticized the slow progress and emphasized the importance of user-friendly, scalable solutions to overcome authentication challenges.
The reliance on cash remains a significant barrier, with 77% of the Rs. 1.26 trillion in circulation held outside the banking system. Although there are 19 million debit cards in use, digital payment platforms like Just Pay and Lanka QR remain underutilized. Government payments totaling Rs. 330 billion annually also highlight the untapped potential of digital systems.
Weerawarana urged the adoption of scalable digital ID systems, streamlined payment platforms, and reduced cash dependency to formalize the economy and promote sustainable growth. By bridging the gaps in the current system, Sri Lanka could unlock significant opportunities in its journey toward digital transformation.
While 19 million debit cards are active, only 1.9 million credit cards are in use, with unique holders likely fewer due to multiple cards. Additionally, government payments total Rs 330 billion annually, but digital payment platforms like Just Pay and Lanka QR remain underutilized.
“Payment is the most fundamental component of an economy—moving money around in some form is essential,” Weerawarana stressed.
He highlighted LankaPay’s “human bridge” initiative, which enables government departments to integrate digital payments even without advanced system setups, as an example of bridging gaps in the current ecosystem.
Weerawarana’s recommendations to limit cash transactions and phase out Rs 5,000 notes aim to drive digital adoption and formalize the economy.
By embracing these measures, combined with scalable digital ID systems and wider adoption of payment platforms, Sri Lanka could unlock significant economic potential.
Weerawarana’s analysis of the current system showed that even with outdated forms of National Identity Cards which were susceptible to forgery there was limited mass scale identity fraud in the country.
