Sri Lanka could benefit and seek higher growth from global electronic payment trends, falling in line more with the current cashless spending patterns, a top official from the US financial services multinational, MasterCard said.

MasterCard South Asia Area Head Vikas Varma said they are upbeat about promoting electronic payments system in Sri Lanka through new deals and products.

“Sri Lanka is a key market for MasterCard in South Asia. We have had significant presence in the country for 25 years. We hope to offer cardholders the best products and services from our global portfolio. Being aware of the market’s true potential, we have renewed our focus over the past year with several country-specific initiatives,” he said.

Highlighting the benefits of electronic transactions, Verma pointed out that for governments, cash costs 0.5 to 1.5 percent of gross domestic product (GDP), depending on the country.

“Eighty five percent of the world’s retail transactions are still done in cash and check. The cost of using cash is quite expensive to the economy – various studies estimate this to be up to 2.5 percent of GDP.”

Meanwhile, for consumers, Verma pointed out that electronic payments help them budget and track spending through itemized purchase records. Merchants also benefit from electronic payments through increased sales, faster check-outs, less fraud and a level playing field for smaller merchants.

“MasterCard is helping shape a better world, where everyday payments are safe and simple for everyone because we’ve moved beyond cash,” he added.

MasterCard sees the development activities taking place in the country and the prospect to reach US $ 4,000 per capita income by 2016 as extremely positive developments and stresses that further growth could be achieved through a more robust electronic banking and payments system.

“We see this as a great opportunity to partner with leading banks to provide world-class secure payment solutions and offerings to local customers,” Varma stated.

Central Bank Governor Ajith Nivard Cabraal recently revealed that a local bank is currently in talks with US-based Paypal to become its partner bank for inward remittances.

Meanwhile, mobile phone penetration in Sri Lanka is one of the highest in South Asia around 95 percent and Internet penetration is about 7 percent. With this, e-commerce and mobile payments have larger headroom for growth.

“We believe that this is the right time to partner with leading merchants in this space and also with its customer banks to accelerate e-commerce and mobile payments,” he added.

MasterCard has entered into a five-year Memorandum of Understanding (MoU) with the Sri Lanka Tourism Promotion Bureau (SLTPB) and is aggressively promoting Sri Lanka as a premier tourist destination.

Through its association with customer banks, MasterCard intends to offer truly exciting benefits and services to affluent Sri Lankan travellers across categories such as dining, hotels and retail. In 2013, MasterCard also announced tie-ups with best-in-class merchants in the country.

Meanwhile, MasterCard’s recent ‘Spend & Win’ campaign got a highly enthusiastic response from customers. The campaign offers Rs.8 million worth of stay vouchers in total and is the biggest consumer campaign launched by MasterCard in Sri Lanka to date.

Reiterating MasterCard’s commitment to the Sri Lankan market, Varma added, “We are excited to work closely with bank and merchant partners to fulfil the potential of the country and the future for electronic payments here.”