Sri Lanka in talks with PayPal for 9 years without breakthrough

The Central Bank last week said they have been talking with the US internet-based payment gateway provider, PayPal Holdings Inc. for the launching of their services in Sri Lanka for almost 9 years 
without a breakthrough. 

While the authorities continue to follow through with current discussions with PayPal, the Central Bank said there are other international entities, which provide a similar service, whom Sri Lanka could tap.

“For the last 8 to 9 years we have been working with them (PayPal) to get this receiving facility to Sri Lanka,” said R.A.A Jayalath, Assistant Governor of the Central Bank. 

The Central Bank has also written to the Sri Lankan envoy in Singapore to take the matter up with PayPal officials there and at present the Bank is also working with an Indian agent of the company to open access to thousands of Sri Lankans to receive payments by selling their goods in international online market places such 
as e-bay and Amazon.com. 

Earlier in the month, Central Bank Governor Prof. W.D. Lakshman confided that they could expect some 
breakthrough this year. 

“The Central Bank has already commenced discussions with international payment service providers, such as PayPal, to enable payment receipt facilities for Sri Lankan residents, and we expect positive outcomes in the near future,” he said. 

“Apart from these, the Central Bank is actively seeking possibilities to develop and promote other forms of payment mechanisms to attract capital flows and to enable e- commerce, thus facilitating cross-border trade. An implementation framework for Open Banking in Sri Lanka is being investigated,” he added.

The pandemic added extra flywheel to going digital as many payments and other financial activities shifted online as people cut in-person visits to physical stores and bank branches. 

Platforms like PayPal, which directly empower small and medium-sized entrepreneurs (SMEs), have become even more critical to Sri Lanka, specially with the downturn in the tourism industry due to COVID-19.  

“As the future of the global financial architecture is going to be essentially digital, the Central Bank will continue its deliberations with local and international stakeholders on its treatment of digital currencies, using thorough cost-benefit analyses and a long-term perspective,” Professor Lakshman added.