HNB digital merchant acquisition surges as more customers shift to cashless payments

Resistance to cashless transactions is rapidly giving way to enthusiastic acceptance as an unprecedented number of Sri Lankans gain greater familiarity with digital banking channels according to HNB Deputy General Manager – Retail and SME Banking, Sanjay Wijemanne. 

The extent of this trend can be best illustrated by the results of a survey by LIRNE Asia. Carried out in 2019, the survey found that Sri Lankan internet users ranked the highest in terms of awareness of ecommerce platforms but lowest in terms of completing transactions through to delivery [1] – primarily citing reasons such as a lack of trust, or necessity to use e-commerce.      

With the onset of the COVID-19 pandemic, Wijemanne explained how these dynamics were completely reversed, as evidenced by the performance of HNB’s extensive digital payments portfolio.     

“Given that HNB had already captured the lion’s share of the market in digital merchant acquisition even prior to the COVID pandemic, increasing national trends in cashless payments tend to be strongly aligned with the performance of our digital portfolio, which we are continuously enhancing,”

“With the timely declaration of 2020 as the Year of Digital Transactions by the Central Bank of Sri Lanka, HNB is now building on the powerful technological foundation established through our ongoing digital transformation to rapidly expand access to digital channels. The results of these efforts are compelling as reflected in the massive uptake in digital payment options – both from customers and businesses,” Wijemanne explained. 

Currently, HNB holds 48% of market share in traditional Point of Sales (POS) terminals (IP/PSTN and GPRS combined), 50% of market share in low-cost mobile POS terminals (HNB MOMO) and approximately 23% in Internet Payment Gateways (IPG) in Sri Lanka.

Notably, in the months of April and May alone, HNB recorded a 566% Month-on-Month (MoM) and 131% MoM growth in registration of new online users.

“Already we are seeing this digital transformation cascade into all parts of the economy. In the coming year, we anticipate that this trend will consolidate into a permanent preference for cashless transactions across Sri Lanka,” he noted.  

Such a rapid proliferation of digital payments creates a compelling financial incentive for almost any enterprise – particularly as affinity for cashless transactions expands out of major urban centres and into all parts of the country.  

“The most interesting developments in cashless payments are still only emerging. Technologies like tokenisation – a technology at the heart of ride hailing and food delivery apps – is likely to expand in the coming months as more local businesses launch dedicated apps with payment features built in. This isanother area in which we have supported some of the most successful tech-based enterprises in the country, by enabling card details to be securely linked to convenient payment portals. 

“These dynamics will ultimately provide valuable and much-needed benefits for a broad spectrum of Sri Lankan enterprise – from small businesses and self-employed individuals to hospitality providers large and small – and ultimately promote a broader and more resilient, and equitable economic recovery. The barrier for entry into a digital transactions has never been lower, and our goal is to make sure that all Sri Lankan enterprises can compete in this new paradigm,” he stated.

HNB with 252 customer centres across the country, HNB is one of Sri Lanka’s largest, most technologically innovative banks having won local and global recognition for its efforts to drive forward a new paradigm in digital banking. The bank has continuously won prestigious accolades including being declared Best Retail Bank in Sri Lanka for 2020 by the Asian Banker Magazine for the eleventh occasion in addition to being highest ranked privately owned commercial bank in Sri Lanka by the prestigious Banker Magazine Top 1000 global rankings 2020. 

Locally, HNB leads the Business Today Top 10 rankings and also claimed seven awards at the Best Corporate Citizen Sustainability Awards 2019. The first Sri Lankan bank to obtain an international credit rating, HNB is rated on par with the sovereign by Moody’s Investors Service, and the national long term rating of HNB revised upward by two notches to AA+ (lka) recently by Fitch Ratings (Lanka) Ltd.

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