Posted by
indi
Online (and cashless) payments suck in Sri Lanka.
We'll discuss this issue further today (September 14th) at the Hive Live, at 6PM. There's a few tickets left, and you can watch online at 6:30. These are the guests:
Until then, here's a quick discussion on online payments in Sri Lanka, as of today.
Today you have a few options for processing money online, and they're not pretty.
You can setup a payment gateway from a bank (Sampath, HNB, etc) or GlobalPay. This costs a lot and is both difficult to setup (code, testing) and use (design and security from 1995).
For the consumer, these gateways are also not a pleasant experience. Each bank has their own one, so you're facing a different interface all the time. Furthermore, they all look pretty dodgy. Finally, your information isn't stored (tokenized) anywhere, so you have to keep re-entering details.
And don't even mention app payments, LOL. PickMe is the only app that stores card details, thru HNB, and that was after years of lobbying and work. We approached HNB about getting the same facility and they don't really return calls or emails, presumably because they don't want the business.
Which is the main problem with the bank based system. They're banks and they already have money. They're not really incentivized to do something new, like enable ecommerce, plus they only make solutions for their own bank, meaning that consumers end up with 12 different options, none of which are very good.
The hack that a few Sri Lankan companies tried was some variation of 1) getting one payment gateway 2) routing multiple businesses through it. They solved the problem of crappy user interface and painful, setup, but it was still a hack.
July 2019 Update: PayHere now has Central Bank approval and is up and running. Here's a quote from them until we update this entire post:
PayHere is growing rapidly empowering 1000+ local businesses with online payments. We're currently the only authorized payment aggregator in SL that processes all online payment methods in a single integration & we enabled Amex, Discover, Diners, Frimi & Genie also very recently in addition to Visa, Mastercard, eZcash, mCash & Vishwa which we initially supported.
You're not supposed to use payment gateways this way, and if you visit PayHere or eCeyPay or BizPay today they'll tell you some variation of 'the government told us to stop, come back later'.
What they're doing is kinda logical as payments should be aggregated on top of multiple banks, but the regulatory environment doesn't currently allow it.
There are also places that do aggregation plus provide a website and shopping cart, like ShopBox.lk and I think WebXPay. Those seem to have survived.
The other option is eWallets, like PayTM (which doesn't work here). That means that you use real money to transfer money into your eWallet. Then you can pay using that. There are a few similar options in Sri Lanka.
This is a bit of a pain because you have to keep topping up this wallet before you buy stuff, but when it reaches scale (like PayTM) it can be a real competitor for cash.
Dialog launched a system years ago called eZ Cash where you can top up a wallet at kades or banks or online or wherever and pay through that. eZ Cash has its market share, and lets you pay bills and stuff, but it hasn't really transformed ecommerce yet. It is acceptable at quite a few places and has a wide network for top-ups.
Every major mobile operator gave up and joined Dialog, except for Mobitel. They have their own mobile wallet which also has a very wide merchant and top-up network.
DFCC Vardhana bank has an eWallet but this requires paperwork to basically setup a bank account with them. Once you set it up then they have a pretty big list of merchants, and of course you can settle bills through it.
This is a new one from Nations Trust Bank. The cool thing here is that you can setup a Savings Account with just a selfie and a photo of your passport/NIC. It's also supposed to enable NFC and QR code payments. Since it's new it has less merchants, but they seem to be onboarding a lot.
I made up this term and it only applies to one product thus far, which hasn't really launched. The idea here is that your card information is stored on the app, so you don't have to manually top it up. You just pay and the money comes off of your credit card or, possibly, debit card.
Dialog Genie (or Pay By Genie) is a working app that you can download and use, but right now only for Dialog bill payments. The cool thing here is that you can enter your credit card details here once and store them. In the future they should be adding support for debit cards and thus connections to bank accounts.
The UI is pretty great, the security seems strong, and the possibilities are many. You can scan a QR code and pay, you can theoretically use it to pay online without entering card details, this could be the one. Also it has Dialog behind it, which means the product will be marketed and could reach scale.
This is a problem that has been solved in other countries, so you can actually just go to Singapore, find a local partner, register a company, setup a bank account and then do online business here normally - through PayPal or whatever. There are also some options that work without you physically leaving.
Stripe is a mature US based payment processor that will incorporate a US based company for you, open a bank account and basically set you up abroad, for $500. On transactions they take a 2.9% commission plus 30 cents. It's a pretty cool program.
2Checkout is a service like PayPal that works in Sri Lanka. The rub is that they take 3.9% commission and 45 cents per transaction. There may also be a fee depending on how you transfer the money into the country.
The main issue here is the cost. You have to add 45-60 Rupees to each transaction, so this basically rules out a lot of smaller transactions here, like cab rides, or even food delivery and the like. There just isn't that much margin.
Another option is card on delivery, or opening up card payments to merchants that don't have fixed locations, or just don't want to pay big setup costs.
These are basically terminals that plug into the headphone jack on a phone and send your card details as an audio signal (which is kinda cool) that an app decodes.
The first big splash in space was HNB Momo. This had a big marketing campaign and widespread adoption for their little card readers.
Payable is a well-funded startup that has processed over Rs. 750m in transactions since June 2016. They'll be at Hive today.
These are some options for the future, from most to least plausible.
JustPay is a backend service that lets you transfer money between banks, without going to a switch abroad. The latter part means that fees are way lower.
The rub here is that it isn't a consumer product per se. Each merchant needs to integrate JustPay on their own, or an aggregator needs to come in and collect a bunch of merchants. Which hasn't happened yet, but it should.
The government was working on something that would tie into a national identity system and somehow handle all payments, but something went weird and it's been shelved for now.
This is what every geek has been asking for for years, but LOL. Like they want to deal with this mess.
...
So that's kinda where Sri Lanka is now, online payment wise. Hopefully some more will come out of the smarter people at the Hive discussion today, you can watch live at 6:30, and we'll share the video here after the fact.
As always, if I missed anything or got anything egregiously wrong, please comment.
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Hungry Hippie
I'm no expert on this topic. How ever, I do a lot of online payments through Commercial Bank and to this date I have not had a problem.
Once and only once did I have to call the call center regarding an online transaction that was just check if my money had been debited or not after a transaction failed and was only notified 2 days later. It was the fault of the seller.
Besides that Commercial has a very recommendable online transaction process. I pay all my bills, insurances, telephone, etc via Commercial.
Shaun
Trying to get the banks to give a payment gateway is so painful here in Lanka. Seems like they don't want the business !!! It is almost like they are doing us or in our case our clients a favor ! Whereas they should be outdoing themselves to get the business. It is just so weird.
Called Commercial bank. Nothing. Called back. Nothing. Contacted all the top people on LinkedIn. Someone responded but they had no info. Finally talked to someone and they asked us to fill out a form to have the costs and rates. Forget them !
Same with Sampath, They were faster but they asked us to fill out a form first. But at least they answered.
HNB no answer. Contacted the top guys on LinkedIn. Nothing.
Guess we will go overseas with our business.
paymentgurulk
Article is misleading on the payment gateways in Sri Lanka, pretty sure there are plenty of people who top-up Dialog connections online and they would knowingly or unknowingly process their payments through solid payment gateways provided by Sampath bank and Commercial bank. You can see this yourself here - https://www.dialog.lk/browse/reloadPayBillOnline.jsp
The interfaces seem pretty up to date and mobile responsive, with the bank, merchant (Dialog for example) and card schemes accepted logos embedded on the payment pages it surely doesn't seem dodgy at all. Again, you can decide this yourself by having a look at the payment pages.
There could be some exceptions though where the merchants had integrated the payment gateway sometime back and are struggling to find internal resources to upgrade to the latest version of banks payment gateway which could be the case with the first screenshot which says payment pages are outdated and looks like from 95.
Dialog is just one example but there are other merchants such as scope cinemas, mydeals, wow.lk, daraz, lassana flora etc who are some of the well know merchants for online transactions and payment gateways integrated in all their sites seem pretty constant and formal.
Funny how the article tries to make fun of the banks to say only pickme has got the ability store and process transactions (TOKENIZATION) but anyone who uses online payments frequently might have come across lankareload who has been providing storage of cards and the ability to make purchases later through their gateway for couple of years now, way before pickme. Again, this is just one example and there are plenty of merchants making full use of "TOKENIZATION" facilities provided by leading banks other than HNB.
Worthwhile mentioning that Dialog Genie is another product which uses TOKENIZATION provided by a paymet gateway of a leading bank.
I would personally prefer to get services through a bank which has more financial stability and of course a good understanding of payments more than anyone else, their services have been accepted as great so far by most of the top clients and easy on your pocket at the same time.
After all, who would want to save their money in a financial institution such as the one owned by "Sakvithi" and lose whatever you have but rather go to a bank regardless of the interest they pay you back.
High time that we Sri Lankans stop whining and get our facts right so that we can make full use of all the available options and enjoy the benefits.
Shashin
Great correction for the misleading article. thumbs up!
thisura98
This article is outdated. Specially information regarding PayHere. Which is now back and accepting payments daily.
Rucky
True, been using it for a year and service is excellent! Just waiting for the Amex integration and it will be perfect for startups~! Great work Payhere.lk
PayHere
PayHere requires a business registration, and only works with Sampath Bank. That isn't an easy solution for start-ups like freelancers and most people don't want to go through the hassle of paperwork.
Thought it would work like PayPal where you can just link any Visa, Mastercard and start receiving money. But it doesn't.