Visa sees digital payments doubling to $ 14 billion by 2027
Daily FT: Global leader Visa has revealed that digital payments in Sri Lanka would double to $ 14 billion by 2027 and vowed to support greater adoption including in the public sector as it celebrates 35 years of excellence in the country.
Visa estimates digital payments to grow to $ 7 billion by end 2023 and expects a Compound Annual Growth Rate (CAGR) of 20% in the next four years propelling the value to $ 14 billion. Separately ecommerce is estimated to grow to $ 2.5 billion and the number of ecommerce users to grow up to 10.7 million by 2027. To achieve this trajectory, Visa said it is firmly committed to partnering with banks, fintech’s, telcos, State-owned enterprises, the regulator and the Government.
“Businesses are transitioning to digital payments. We remain very excited about accelerating this digital transformation. We are going to be further integrating even more advanced technology and experiences into our partnerships,” Visa Asia Pacific Chairman Chris Clark, who is in Sri Lanka to participate at 35th anniversary celebrations, told journalists yesterday.
Present in over 200 countries and territories, Visa has been championing the use of digital payments as they offer unparalleled ease, convenience, security and efficiency.
Visa Country Manager for India and South Asia Group Sandeep Ghosh said for countries like Sri Lanka, displacement of cash translates into multiple benefits – the growth of the formal economy, digital commerce, greater trust, transparency at reduced cost in all forms of money, movement and hours, the ecosystem, leading to financial inclusion and in some form of shape democratization of credit. At merchant level Visa estimates the cost of dealing with cash at 14% in the South Asian region.
According to Visa, from a personal consumption expenditure, Sri Lanka has some distance to cover in terms of displacing cash with digital payments with less than 25% of expenses of individuals happening through digital means.
Visa also sees great potential in great adoption to digital payments by the SME sector, numbering over 1 million and accounting for 52% of the GDP and generating 45% of jobs. “These small and medium enterprises and small businesses also stand to benefit immensely from digitization of their payment flows,” added Ghosh.
To support women-led SMEs, Visa has announced a pledge of Rs. 13 million to The Asia Foundation to launch a dedicated program. Visa will provide seed funding to a group of selected women-led SMBs apart from aiding skills development, knowledge sharing and collaboration, as well as promote financial inclusion among women-led small businesses.
“While we commit to bringing the best of products and solutions to this market, we are also deeply committed to financial inclusion. We believe that inclusive growth, access to credit will empower the consumers, the businesses, and the community at large,” said Ghosh.
Visa’s prediction on the expansion in Sri Lanka’s digital payment platforms is indicative of the overall growth of the country’s economy. Sri Lanka’s economy has shown great resilience to external and internal challenges through the years and is once again on the growth path after facing the impact of the global pandemic and the economic crisis that followed. However, there is now an expansion in business/investment opportunities in the country with Sri Lanka working towards becoming an emerging business destination in the South Asian region. The country’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have also helped boost opportunities in the country. With the expansion in the digital economy sector there’s a clear growth in the ICT and digital infrastructure development sectors. Given the growth and business potential in the country, foreign businesses/investors could explore the growing opportunities, especially in the ICT and digital infrastructure development sectors.
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