COLOMBO (News 1st); Sri Lanka's digital transformation is gathering pace, with the country's expanding digital payments ecosystem being recognised by the International Monetary Fund (IMF) as a significant driver of improved public service delivery, financial inclusion and fiscal governance.
In its report, Shaping the Future of Asia: Opportunities and Challenges, the IMF highlighted Sri Lanka's GovPay initiative as a notable example of how digital payments can modernise government operations and strengthen transparency in public administration.
Launched in February 2025, GovPay is a centralized digital payments platform that enables citizens to make real-time payments for a wide range of government services, including local authority taxes, traffic fines, permits and educational fees through online banking platforms and digital wallets.
The report notes that by November 2025, GovPay had processed 50,602 transactions valued at Rs. 1.4 billion, equivalent to approximately US$4.6 million, across more than 200 government institutions, marking an important milestone in Sri Lanka's efforts to digitalise public finances.
GovPay operates through the LankaPay Online Payment Platform, which has connected government agencies to Sri Lanka's instant interoperable payment network known as the Common Electronic Fund Transfer Switch (CEFTS).
According to the IMF, the platform holds significant potential to transform government revenue collection and public service delivery by reducing cash handling, minimising in-person transactions and lowering administrative costs.
The report further states that GovPay could improve liquidity within the banking sector by bringing cash held outside the formal financial system into regulated financial channels.
In addition, the IMF notes that the platform's transparency and traceability can help reduce leakages and vulnerabilities to corruption while providing citizens with faster and more reliable access to public services.
However, the report cautions that continued progress will depend on strengthening digital financial literacy, particularly in rural communities, to encourage wider adoption and build public confidence in digital services.
The IMF also emphasises the importance of maintaining strong regulatory compliance, enhancing cybersecurity protections and investing in reliable digital infrastructure, including affordable, high-quality internet access, to maximise the benefits of GovPay and ensure inclusive participation in Sri Lanka's digital transformation.
The report further highlights CEFTS, Sri Lanka's real-time interoperable payment infrastructure launched in 2015 and operated by LankaPay, describing it as a system comparable to India's Unified Payments Interface (UPI).
CEFTS provides a unified payment network that enables instant transactions through banks, fintech payment applications and online banking services.
Within the CEFTS framework, the JustPay platform allows banks and fintech providers to facilitate mobile and web-based payments for utility bills, fund transfers, taxes, retail purchases, government services and capital market transactions by linking customer bank accounts to third-party payment applications.
The IMF notes that this open and interoperable payments architecture has expanded competition within the digital payments sector while increasing access to low-cost payment solutions for consumers and businesses.
Another key component of Sri Lanka's digital payments infrastructure is LankaQR, the national quick response code standard introduced in 2018.
LankaQR enables merchants to accept digital payments from any participating bank or fintech application through a single interoperable QR code.
In 2024, LankaQR became interoperable with India's UPI system, allowing Indian visitors to make real-time QR-based payments at LankaPay merchant locations across Sri Lanka.
The platform has also established connections with Alipay+ and UnionPay China, further expanding cross-border payment capabilities and supporting tourism by enabling seamless digital transactions for international visitors.
According to the IMF, deeper integration between Sri Lanka's CEFTS platform and international payment systems could facilitate trade, remittances and broader cross-border payments while generating substantial economic and efficiency gains.
The report also highlights the role of CEFTS in modernising government revenue collection.
Since 2017, major state revenue agencies, including the Sri Lanka Customs and the Inland Revenue Department, have been connected to CEFTS through the LankaPay Online Payment Platform.
As a result, citizens can make payments to participating government institutions through online banking services and interoperable payment applications, with funds transferred instantly to government accounts.
By the end of 2024, more than 40 percent of total government revenue collected by eight major state institutions was processed digitally through LankaPay.
The IMF states that real-time settlement capabilities improve accounting accuracy, strengthen treasury operations, reduce administrative costs and enhance transparency and efficiency throughout the public sector.
Looking ahead, the report notes that while Sri Lanka's payments infrastructure is relatively advanced, the country's identity and data layers remain under development.
The National Data Exchange Platform is currently being designed to facilitate secure and transparent data sharing among government institutions, reducing administrative silos and improving operational efficiency.
Meanwhile, the Sri Lanka Unique Digital Identity Project, scheduled to begin rollout in the third quarter of 2026, is expected to provide a secure biometric and demographic digital identity platform based on the Modular Open Source Identity Platform.
Once operational, the system is expected to improve access to public services, streamline administration and reduce fraud and duplication across government systems.
The IMF concludes that realizing the full benefits of Sri Lanka's digital transformation will require robust data governance frameworks and strong privacy protections, alongside continued investment in digital infrastructure, inclusion and innovation.
