Mobile Payment in Sri Lanka: Market Demand Assessment. Dr. Peter Lovelock Director, TRPC. The Study. Reasons for the study: Lack of reach to the bottom of the pyramid segments:
Dr. Peter Lovelock
Financial institutions have been limited in expanding their services to reach more people at the base of the pyramid. High cost and limited infrastructure means that more affordable solutions are needed.
Due to large unbanked population and widespread use of mobile phones, mobile banking offers a new business model and delivery channel, to increase financial access to a wide range of services while reducing transaction costs.
With no proven models of mobile baking in Sri Lanka, this study was conducted to understand the demand for mobile based financial solutions, to help establish the availability of a viable business model for such services in the country.
Cash is still king in Sri Lanka, and there are significant numbers who would make use of an account if given reasonable access – reasonable in terms of access, price, convenience and trust
At high rates of penetration the mobile phone is an ideal alternative access channel for offering services such as financial access – particularly in the case of remote rural citizens who are otherwise not considered by the banks.
Monthly Average Household Expenditure (LKR):
Purpose of using a debit card by SEC (percentage)
Mobile Phone Use and Desired Use
Awareness of M-Money Services (%)
Mobile money drivers
Demand for Different Type of M-Money Transactions (percent)
Drivers: Ease of use, safe handling of money, and wide accessibility –in other words, convenience and security
Note: SEC split for total population = SEC A 10%, SEC B 20%, SEC C 45%, SEC D 18%, SEC E 7%.
For example, as per above table, 1.3 mio of Sri Lanka’s population falling into SEC A, demand to pay utilities through M-Money
Barriers to mobile money
Sri Lanka is still largely a cash-based economy; vast majority of transactions carried out in cash. Mobile payments uptake is increasing but much needs to be done for mass adoption of such services to take place.
National Payment Corporation of India:Interbank v. Intrabank Mobile Transfers
Point of Transaction
Scenario 1: Mobile Intrabank transfer
Performed as existing ‘on-us’ transaction.
Scenario 2: Mobile Interbank transfer
Performed through existing LankaClear clearing/settlement, augmented as necessary to support instant transfers
Scenario 3: e-Money-to-Account transfer
eMoney funds held in escrow purchased/transferred by escrow managing bank to then initiate either ‘on-us’ or interbank transfer
Scenario 4: Bill pay
Agree to common billing codes conforming to biller’s account number; support directory to map customer’s bill account to bank account.
for sending service before cash-out
Product/ Company- based decisions
Frequency of top-up (%)
Bank Account Possession by SEC
Bank Account Possession by Household Income
Frequency of Usage
Demand for Different Type of M-Money Transactions (%)
Mobile money services demanded by respondents that would drive adoption are utility payments, remittances, retail payments and phone bills.