Sri Lanka embraces digitalization with 14.6 million internet users.
By: Staff Writer
Colombo (LNW): Sri Lanka has seen substantial progress in embracing digitalization, with 14.6 million internet users and 7.2 million active social media users as of early 2023, analysis from Robocash Sri Lanka has revealed.
In the forthcoming years, Sri Lanka is set to implement a Digital Government initiative, which aims to streamline digital identification and document digitization.
This initiative is expected to significantly facilitate electronic Know Your Customer (eKYC) for digital service providers and further boost fintech penetration.
The country’s digital literacy rate, on par with developed European Union (EU) countries at 57 percent, reflects the strong digital skills among its adult population.
Notably, the e-commerce sector is thriving, boasting 5.5 million users and a market value of Rs.777.6 billion (US$ 2.4 billion) in 2023, primarily driven by the electronics segment.
The e-commerce market is projected to maintain an impressive compound annual growth rate (CAGR) of 15.29 percent from 2023 to 2027, reaching a market volume of Rs 1,387.52 billion (US$ 4.28 billion) by 2027.In an era marked by the COVID-19 pandemic, digital payments in Sri Lanka have experienced remarkable growth.
Transactions have surged from Rs 5.6 trillion in 1Q2021 to RS 9.4 trillion in 1Q2023, representing a growth rate of 68 percent over 2 years.
The value of transactions via the Lanka QR digital payment gateway amounted to Rs. 681 million in 3Q2023, showing a growth of 84 percent year-on-year.
Both the Sri Lankan government and the private sector have made substantial efforts to promote digital payments, playing pivotal roles in enhancing digital payment solutions and fostering financial inclusion.
As of 2022, approximately 90 percent of the population holds active bank accounts, and there are a notable 18.7 million debt cards in circulation.
This has contributed to an outstanding 85 percent debit card usage rate, significantly surpassing the global average of 51 percent.
However, the utilization of credit cards in Sri Lanka currently stands at 10 percent, which is slightly below the global average of 22 percent.
The number of digital payment users is projected to reach 10 million by 2027, with a projected transaction value of Rs. 4,481.32 billion (US$ 13.83 billion), growing at a CAGR of 20.54 percent.
Notably, mobile point-of-sale (POS) payments are anticipated to dominate, with 3.2 million users and a transaction value of Rs 2,342.16 billion (USD 7.24 billion).
Additionally, the Digital Assets segment is on track to reach Rs. 3,978 million (US$ 12.25 million) in 2023, with a remarkable 56.5 percent revenue growth projected for 2024.
Sri Lanka’s total volume of digital retail payments can potentially reach up to Rs 77.2 trillion by 2027, 128 percent more than the 2022 level, analysis from Robocash Sri Lanka has revealed.