Recently, Nivard Cabraal, Governor of Sri Lanka’s central bank, publicly urged staff at Hindu temples and other places of religious worship in Sri Lanka to move beyond cash donations and set up point-of-sale terminals using contactless payment technology. At a press conference, Cabraal encouraged religious institutions to set up “tap and pray” terminals similar to the transit fare terminals that can be found in leading international cities like London (Oyster card) and Hong Kong (Octopus card).
With an ongoing coin shortage in the country, the central bank is urging Sri Lankans to replace the customary practice of leaving coin donations with electronic payment donations. The coin shortage is so severe that the central bank is planning a series of initiatives to boost the number of coins in circulation, including by sending teams to collect coins donated at religious sites in exchange for banknotes. The central bank is in negotiations with Hindu and Buddhist temples and Christian churches in neighboring India to collect over 30 tons of Sri Lankan coinage.
While the push for electronic payments in Sri Lanka is born out of an ongoing currency crisis, the move away from traditional payment instruments like cash is an issue that many developing countries are encountering as consumers around the world begin to use payment cards for the first time. Contactless payment technology may be one of the more effective means of bridging the consumer payment experience from traditional payment options to electronic payment forms.
The convenience of contactless payments may negate the advantage of cash over electronic payment forms and as a result should help boost electronic payment use not only in the U.S. but in many developing countries.
For more information on global contactless developments, see Mercator Advisory Group’s research note, International Contactless Payment Developments, released in October 2013, and for more information on cash use and other debit payment topics in the U.S., see Mercator Advisory Group’s research report, Consumers and Debit 2013: A Shift to Alternative Payments, released in December 2013.
This Mercator Advisory Group Perspective is an extract taken from our Mercator Advisory Group’s members only library, which provides additional analysis and guidance to assist our members in uncovering new market opportunities and optimizing current strategic initiatives for maximum revenue generation and cost containment. See the full blog library of public and private blogs here
To gain full access to Mercator Advisory Group’s blogs, research, primary data (CustomerMoitor Survey Series), advisory and consulting services or to learn more about becoming a member of Mercator Advisory Group email us at email@example.com or call us at (781) 419-1709.