The government has eliminated the Merchant Discount Rate on LankaQR transactions up to Rs. 5,000, effective April 6, as part of a broader push to transition Sri Lanka toward a cash-lite economy.
The initiative, launched under President Anura Kumara Dissanayake’s National QR Payment Promotion Project, removes the fee merchants previously paid on small digital transactions. LankaQR currently operates at approximately 450,000 merchant locations with support from more than 20 financial institutions.
Incentives and reach
A prize draw programme will reward both consumers and merchants with weekly and monthly prizes of up to Rs. 1 million. A multilingual awareness campaign in Sinhala, Tamil, and English launches alongside the fee waiver, supported by a Social Visibility Index covering all 25 districts.
Digital payments context
Sri Lanka processes approximately 68 million electronic transactions worth Rs. 6.3 trillion per quarter through its CEFTS system. However, LankaQR’s share remains modest — around 274,000 transactions per quarter as of mid-2025 — suggesting significant room for growth.
With Rs. 1.48 trillion in physical currency still in circulation and 89 percent of adults having banking access, the government sees digital payments as a way to reduce cash dependency. The move also carries practical benefits during the current energy crisis: fewer cash transactions mean fewer trips to ATMs and banks, conserving fuel during rationing.
