Recent Payment & Settlement System
Developments
in Sri Lanka
13th SAARC Payments Council Meeting
Thimpu, Bhutan
July, 2013
National Payment & Settlement System
of Sri Lanka
CHEQUE
IMAGING &
TRUNCATION
SYSTEM
SRI LANKA
INTERBANK
PAYMENT
SYSTEM
CARD BASED
PAYMENT
MECHANISMS
REAL TIME GROSS
SETTLEMENT
SYSTEM
PHONE BASED
PAYMENT
MECHANISMS
INTERNET BASED
PAYMENT
MECHANISMS
Major Developments in 2013
SYSTEM
DEVELOPMENTS
- Launch of the Common
Automated Teller Machine
(ATM) Switch
- Completion of adoption
of Terminal Line
Encryption technology
REGULATORY
IMPROVEMENTS
The regulatory framework
was strengthened by,
- issuing Directions to
regularize the operations
of Common ATM Switch
- revising the Regulation
on payment cards and
mobile payment systems
- Revising System Rules
of RTGS & SSSS
Common ATM Switch

The Common ATM Switch (CAS), the first phase of
the Common Cards and Payment Switch (CCAPS),
was launched in July 2013.

Two state commercial banks joined CAS in the
inaugural stage.

CAS offers inter-linked service across all the ATMs of
CAS member institutions enabling customers of
member institutions to carry out their ATM
transactions in domestic currency through any ATM of
member institutions conveniently.
Common ATM Switch

CAS improves the efficiency and effectiveness of the
domestic ATM network thereby reducing transaction
costs in the financial system.

More importantly, CAS will contain the outflow of
foreign exchange involved in domestic ATM
transactions that existed previously.
Terminal Line Encryption Technology

Adoption
of
Terminal
Line
Encryption
(TLE)
technology in Point-of-Sale (POS) terminals was made
mandatory for financial acquirers by the National
Payments Council, which is the highest policy making
body for the national payment system in Sri Lanka.

Accordingly, migration to TLE was completed by 31
March 2013.

As at end March 2013, the total number of TLE
enabled POS terminals operating across the country
amounted to 24,949.
Regulating the Common ATM Switch

Two Directions were issued in 2013 with respect to
the Common ATM Switch, namely
◦ General Direction No. 01 of 2013 – Operations of the
Common ATM Switch
◦ General Direction No. 02 of 2013 –Fees Chargeable on
the Transactions effected through the Common ATM
Switch
Regulating the Common ATM Switch

General Direction No. 01 of 2013 – Operations of the
Common ATM Switch
◦ To be adhered by the operator and members of CAS
◦ Specifies responsibilities of the operator and members of CAS,
and arrangements for business continuity and maintaining data
confidentiality

General Direction No. 02 of 2013 –Fees Chargeable
on the Transactions effected through the Common
ATM Switch
◦ To be adhered by CAS members
◦ Sets out upper limits on fees to be charged from the customer
by the issuer and interchange fees to be charged from the
issuer by the acquirer, with respect to cash withdrawals and
balance inquiries
Revision of the Regulation on Payment
Cards and Mobile Payment Systems
The Regulation on payment cards and mobile payment
systems was revised inter alia to:
 streamline the licensing procedure;
 revise regulatory powers relating to enforcing the
Regulation;
 change the eligibility criteria to apply for a licence;
 simplify the classification of businesses relating to
payment cards and mobile payment systems;
 adopt a more flexible fee structure.
THANK YOU !