LMDtv 1

Sri Lanka’s shift towards a digital economy has gained visible traction in recent years with digital payments at its core. “The public had begun to adopt digital payments widely, especially over the last three years,” said the Country Manager of Mastercard Sri Lanka and Maldives Sandun Hapugoda, during an interview aired on LMDtv not long ago.

Pointing to a striking evolution in consumer behaviour, he noted: “We see a huge shift from credit card to debit card usage. Today, debit cards contribute more in terms of spending than credit cards.”

Currently, there are around 20 million debit cards in circulation across Sri Lanka and every one of them is contactless enabled.

Hapugoda revealed that contactless transactions have surged from 19 percent two years ago to nearly 55 percent today, which reflects a growing confidence among consumers. He asserted that “the shift is a good sign but we must keep innovating around this changing user behaviour.”

He said that SMEs will be the next wave of growth in the digital economy because they account for a sizeable share of Sri Lanka’s business landscape and GDP.

However, Hapugoda stressed that before discussing digital payments, the focus should be on digitising SMEs: “We need to help them adopt digital tools, reach new global markets and accept digital payments – education is key.”

He highlighted innovative, low-cost technologies such as SoftPOS that turns any smartphone into a payment terminal and Soundbox, which enables QR and contactless transactions. “There are sufficient solutions in the market. What’s needed is awareness and access,” he explained.

Sri Lanka has the digital infrastructure to support rapid acceleration and Hapugoda observed that “the country has a decent foundation but what we need now is execution.”

He lauded the establishment of the Ministry of Digital Economy as a positive step with several initiatives already underway. “The key is to maintain consistent policies and foster collaboration. Since we can’t do everything alone, we must attract international partnerships and investment,” he urged.

Among the low hanging fruit, Hapugoda highlighted digitalising public transport using contactless payments, adding: “We already have 20 million contactless enabled debit cards. If we apply this to transport, it will transform daily payment habits and increase digital adoption.”

He also called for exploring open banking, blockchain technologies and enhanced cybersecurity frameworks to strengthen public trust as confidence is fundamental to digital adoption. To this end, he noted that “without public trust, we can’t expand digital payments.”

Hapugoda welcomes the introduction of Sri Lanka’s Personal Data Protection Act and new cybersecurity laws but says practical awareness remains vital, emphasising that “cybersecurity shouldn’t be an afterthought; it must be built into every stage of product development – a security by design approach.”

And he also observed the rise of biometric authentication that combines active methods such as fingerprint or facial recognition with passive biometrics, and the analysis of how users interact with devices.

“Even how you hold your phone or the pressure you use to type can create a unique digital identity,” Hapugoda said.

He envisions rapid acceleration within the next five years. “With the right infrastructure – such as digital IDs and open banking – the digital economy’s growth curve will be exponential,” he asserted.

He also stressed the need for talent retention, and smarter recruitment in digital and tech driven public roles: “To execute policies effectively, we need the right people in the right places, even if it means rethinking salary scales and recruitment models.”

Ending his interview on an optimistic note, Hapugoda said: “Sri Lanka is at the edge of a holistic growth curve. If the government, private sector and global partners would collaborate, we can change the entire trajectory of our digital economy.”