India’s push to introduce RuPay services in Sri Lanka aims to enhance digital payment connectivity between the two countries, facilitating smoother transactions for businesses and tourists alike. However, negotiations between Indian and Sri Lankan banks have hit a roadblock over fee payment arrangements for RuPay card transactions.
The Indian government is eager to expand digital payment services with Sri Lanka by offering RuPay card services, building upon the success of Unified Payments Interface (UPI) services already available in the country. The extension of RuPay services would enable mobile-based payments and settlements, fostering greater economic integration between India and Sri Lanka.
Government officials familiar with the matter revealed that while there are currently no active discussions through NPCI International Payments Ltd (NIPL) for RuPay technology in Sri Lanka, both central banks are working to make this service available soon. This initiative aims to enable the use of RuPay cards for shopping and cash withdrawals from ATMs in both nations, facilitating seamless financial transactions for users.
However, negotiations have encountered challenges regarding the commissions charged by banks for processing digital transactions using branded payment systems like RuPay. Despite these hurdles, authorities remain optimistic that the issues will be resolved expeditiously, paving the way for Sri Lanka to join Bhutan and Mauritius as the third country to permit both UPI and RuPay transactions.
Queries directed to relevant authorities, including the Ministry of External Affairs, the Department of Financial Services, NPCI, and Sri Lanka’s High Commission, have yet to receive responses, indicating ongoing deliberations on the matter.
RuPay, a product of the National Payments Corporation of India (NPCI), was introduced to offer an indigenous alternative to international card payment providers and promote India’s transition towards a less-cash economy. With services already operational in Nepal, Bhutan, Mauritius, Singapore, and the United Arab Emirates, expanding into Sri Lanka would further bolster RuPay’s global footprint.
The RuPay network, supported by over 1,100 banks, including private, public, and cooperative banks, has witnessed significant adoption in India, with more than 750 million cards issued, constituting over 60% of the total cards in circulation. Prominent banks such as State Bank of India, Punjab National Bank, ICICI Bank, and HDFC Bank are among RuPay’s core promoter banks, underscoring its widespread acceptance and usage across the country.
By facilitating RuPay transactions in Sri Lanka, India seeks to deepen economic ties, promote financial inclusion, and streamline cross-border payments, ultimately fostering greater regional cooperation and economic growth. As negotiations progress, stakeholders remain hopeful that a mutually beneficial agreement will soon be reached, unlocking new opportunities for businesses and consumers in both nations.