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India's PhonePe enables UPI payments for travellers in Sri Lanka

Vivek Vishwakarma
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phonepe sri lanka

India's UPI payments giant PhonePe has partnered with LankaPay, the national payment network of Sri Lanka, to facilitate cross-border payments

The partnership allows Indian tourists visiting Sri Lanka to make seamless payments using the Unified Payments Interface (UPI) at various merchant points equipped with LankaQR codes.

The move will simplify transactions by allowing payments directly in Indian Rupees (INR), thereby avoiding the hassle of currency exchange.

How does it work?


Simply put, Tourists or business travellers need to scan the LankaQR code displayed at merchant locations. The payment amount will be automatically converted and debited in INR from the user's bank account, with the merchant receiving the settlement in Sri Lankan Rupees (LKR).

PhonePe said the transactions will be facilitated by the Unified Payments Interface (UPI) and LankaPay National Payment Network.

Ritesh Pai, CEO of international payments at PhonePe, explained that the merchant discount rate (MDR) is charged to merchants, with a portion of this fee passed on to the issuer. Due to the cross-border nature of the transaction, a slight markup may be applied to account for exchange rate fluctuations, he said.

Impact on tourism and local businesses

It's worth noting that PhonePe's partnership with LankaPay is poised to enhance the convenience for Indian tourists, who are a significant demographic in Sri Lanka's tourism sector.

Channa de Silva, CEO of LankaPay, highlighted the potential of this collaboration to improve the payment experience for visitors, offering a cost-effective alternative to traditional card payments. Local businesses also stand to benefit from increased competitiveness and ease of handling transactions. 

"We are excited about the potential of this collaboration that would enhance the payment experience for Indian tourists and business travellers during their stay in Sri Lanka and also provide the merchants with a cost-effective proposition to card payments. I envisage that innovation to be the cornerstone of this alliance and would lead to further strengthening of bilateral relations between the two countries," Silva said.

UPI global expansion

The adoption of UPI in Sri Lanka is part of a larger trend towards digital financial integration in the region.

The National Payments Corporation of India (NPCI) is actively promoting UPI's international expansion, with the service already operational in countries like Mauritius, UAE, Singapore, Bhutan, Nepal, and now Sri Lanka. 

PhonePe, with over 530 million registered users and processing more than 230 million transactions daily, is undoubtedly leading this expansion.