An Echelon Media Company
Monday December 4th, 2023

PAYable: Taking Sri Lanka’s Payment Systems to a New Era

Yohan Wijesiriwardane CEO and Co-Founder of PAYable

PAYable transformed the cashless payment landscape in Sri Lanka when it first introduced its mPOS system in 2016. Building on its success, the company now looks to transforming the digital payments ecosystem in Sri Lanka. In conversation with Echelon, PAYable CEO and Co-Founder Yohan Wijesiriwardane shared a snippet of PAYable’s growth as a market disruptor and empowerer of businesses.

How has PAYable evolved in its journey until today?

We created PAYable in 2016 after considering one question; Why was cash so prevalent in the market when Sri Lanka is a well-banked country with a high penetration of credit and debit cards?

The answer we discovered was that traditional payment terminals were expensive. It wasn’t feasible for a small merchant; their return on investment was too long. Because of this, we had only about 42,000 terminals in the market after decades of nurturing electronic payment systems.

We wanted to build a low-cost, local solution from the ground up, which we developed starting in December 2014 for about a year. The result was mPOS which used a 20-dollar card reader from China paired with an app and processing module built locally.

We attacked the market aggressively, offering everything free with no rentals or additional charges. Our goal was to maximize growth and adoption. Fast forward to today, we’ve onboarded about 35,000 merchants, partnering with almost all the banks operating in the country. We’ve processed over 50 billion rupees and recorded over 2 billion rupees worth of transactions in a month.

Having come this far, we are now looking to the future. We see a lot of opportunity now in digital payments after the pandemic increased adoption and are building new technology with this in mind.

How do you expect PAYable’s new digital payment solution will disrupt the market again?

Before us, you needed to be a registered business to become a merchant. Partnering with banks, we changed this and enabled individuals. mPOS disrupted payment systems using a smartphone and card reader, a much cheaper alternative. But importing the card reader is now becoming a challenge because of the economic crisis and inflation. That cost is not something that anyone is willing to bear.

Using a purely app-based solution through a smartphone’s built-in NFC capability, we’ve lowered the barrier to adoption even further. Most debit and credit cards today are NFC-enabled, and this shift is what we see as the next disruption point.

We expect this technology to have a significant impact on salesforce automation. For example, an insurance company with 5,000 agents or a delivery service spread across the island now needs only to deploy an NFC-enabled smartphone to accept digital payments. The same goes for any business that requires collecting payments.

The new digital onboarding process for merchants will also be a game-changer. Now a merchant can sign up and be operational within about three days. Like mPOS, we expect the digital-based system to be the next evolution. So far, we see positive trends.

It seems as if PAYable has built an identity as a market disruptor. Do you see it that way?

The technologies we build have been disruptive, and we will continue to build technology that has the potential to shake up the landscape and change the market. But PAYable is more of an empowerer than a disruptor.

We understand what works, what is out there and what will work here. Using this, we bridge gaps and build solutions that empower businesses. It’s what we did with mPOS and all the technology we’ve developed.

What factors have you observed slow down the process of introducing new technology and systems?

There are many external factors, including the ongoing financial crisis. The economy is shrinking, and the market is slowing down. Although things have begun to stabilize, the import ban and devalued currency have made importing new tools and technology a challenge. This includes the card readers needed for mPOS.

Our new digital system using NFC-enabled smartphones has a lot of potential, but the price of such a device has risen, and not all smartphones have NFC functionality.

But human behaviour is another factor. For example, we’ve had the technology for tap-based payments for years, but we still hardly see anyone using it. Even for mPOS, when we onboard a merchant, the chances of them being active users increases if we visit and re-educate them about the system after three weeks.

Even our statistics show a similar pattern. Many merchants get on board during December when people want to buy things, and many prefer using their debit or credit cards. Once they adapt to it, they continue using the technology even after the period they need it, from January onwards.

We have understood that when users are comfortable and the technology is accessible, adoption is faster. We were the first company to have a trilingual payment acceptance system. We ensured that if an error occurs when using our apps, it explains what has gone wrong to the user instead of showing an error code they don’t understand. Our marketing gives a lot of attention to teaching the masses how to use the technology.

Our effort is showing results. For example, merchants prefer using mPOS because it supports their native language, even refusing POS terminals.

There’s a false belief that people don’t adopt new payment technology because of the fees attached to it or MDRs. But in our experience, it’s about creating habits and changing behaviour. I remember when we first started, a bank we reached out to rejected us, claiming that digital wallets are the future and that cards are dead. But we are still using them six years down the line. A majority of daily transactions still take place using cash.

How do you predict your latest technology will fare against these obstacles?

We expect the shift to an app-based environment will continue, and more merchants will seek digital solutions. But this will be more gradual compared to mPOS. Sri Lanka is a well-banked country, unlike many non-banked nations, with almost every bank having its dedicated app. But people aren’t making full use of the available technology, using them only to pay bills and conduct other basic transactions.

The key will be changing user behaviour, Covid was a catalyst for that. With good naming, spreading awareness and informing the public, we can expect this transformation to accelerate. There is a blue ocean of opportunity out there.

Where do you see the most opportunity for growth?

I see a lot of opportunities in the Northeast. It’s one of the most under-penetrated areas which can grow at a rapid pace. But that doesn’t mean that there’s no opportunity in the western province and other urban areas either. New businesses always appear as industries grow. Although growth is slower, merchants from the western province and other urban areas are less likely to be inactive compared to those from rural regions.

As much opportunity exists in more rural areas, the growth in those areas has to be more natural. A good place of entry we see is through tourism and supply chain industries to empower mass-scale adoption.

What do you think PAYable’s place is in this ocean of opportunity?

We have always been an empowerer, and we aim to empower at least a third of the 1.5 – 2 million SMEs in Sri Lanka. To give them access to electronic payments and integrate them into the banking system, unlocking its many opportunities for them.

Our technology is built with the purpose to benefit and empower lives. It has always been a part of who we are. That is why our end goal is to create a Sri Lanka with merchants who are more fluent in finance and banking and able to integrate themselves as valued members of the financial world. This has been the DNA of what we do as a company and will continue onward.