An Echelon Media Company
Tuesday December 5th, 2023

Why DirectPay is the Fastest Growing Fintech in Sri Lanka

(L-R) Sasindu Pathiranage Co-Founder/COO Kanishka Weeramunda, Founder/CEO Dinesh Karunathilaka Co-Founder

There is a reason why DirectPay, a state-of-the-art fintech driving financial inclusion through cashless means, won the Best Disruptor 2021 award at the SLASSCOM Ingenuity Awards (along with two other awards for Best Disruptor – Western Province and Best Innovation in Business Management). Before we get to that, here is why the SLASSCOM Ingenuity Awards is so important.

SLASSCOM, the primary tech industry body, has unveiled an ambitious project called the Island of Ingenuity to upscale the technology industry in Sri Lanka and transform the country into an innovations hub. Composed of over 200 companies (including global firms such as LSEG Technology, IFC, PwC, Stax and Virtusa) that employ over 30,000 people, SLASSCOM is committed to remoulding Sri Lanka into an Imagination Economy. It wants ICT/BPM-related exports to become the top foreign exchange earner for the country. The Island of Ingenuity project envisions building a USD 5 billion revenue tech industry, creating over 200,000 jobs, and establishing 1,000 IT/BPM startups. Among the many initiatives to bring The Island of Ingenuity to fruition is the annual SLASSCOM Ingenuity Awards. The awards acknowledge, celebrate, and showcase those innovators (and disruptors) contributing the most towards establishing a tech-led economy.

DirectPay, a fintech founded in 2018, winning the Gold award for Sri Lanka at the Asia Pacific ICT Awards 2018, Best Startup Award 2018 at NBQSA and the Best Disruptor 2021 award, is both an acknowledgement from its peers and a testament to the disruptions, or rather, high-impact transformations the startup was driving. DirectPay is enabling and influencing digital payments across the economy where cash transactions yet dominate. In just 24 months since launching, DirectPay has reported more than Rs3 billion worth of digital payments and transactions across banking, insurance, and e-commerce, to become the fastest-growing fintech, having surpassed the Rs2 billion threshold four months earlier!

“We are blessed to have a team of developers who share our vision, are ever willing to pivot quickly, learn fast and move on. The team is relatively young but dynamic and inspirational. They are the real competitive advantage we have, enabling us to provide superior customer service that no one else does,” Weeramunda said.

Co-founded by Chief Executive Kanishka Weeramunda, Dinesh Karunathilaka and Sasindu Pathiranage, DirectPay has a USD 7.5 million valuation and will soon launch a Series-A investment round to finance a new financial service and towards market expansion here and overseas. It wants to build a digital payment system that links businesses and consumers with any bank. “We will grow our topline and profitability by ten times over the next five years,” Weeramunda said, explaining the scale of opportunity that DirectPay can potentially unlock.

In just 24 months since launching, DirectPay has reported more than Rs3 billion worth of digital payments and transactions across banking, insurance, and e-commerce, to become the fastest growing fintech, having surpassed the Rs2 billion threshold four months earlier!

DirectPay has enabled digital transaction platforms in partnership with Cargills Bank, Commercial Bank PLC, and Nations Trust Bank. It collaborates with Visa, MasterCard, Amex, Diners Club, Discover and UnionPay International to enable online transactions. In insurance, DirectPay works with AIA, Ceylinco Life, Janashakthi Life, LOLC Insurance and BIMA Insurance Brokers. DirectPay facilitates online payments for UPS Sri Lanka and leading e-commerce companies in the country.

Weeramunda recalls that starting a fintech was not easy. He said, “There were regulatory challenges to navigate and a strong banking system with deep legacies to contend with.” At the time, banks were also investing in online and mobile payment systems, so Weeramunda was quick to position DirectPay as an enabler and facilitator of digital transactions rather than a fintech looking to disrupt legacy financial services business models.

Taking this B2B model further, DirectPay creates bespoke secure digital payment solutions: it could either be a mobile-based payment app or an internet payment gateway, a payment link to receive remote payments, subscription payments, including recurring revenue and bill settlements, and POS platforms. “Whichever it is, we ensure a seamless journey to customers or service providers, covering the entire payment ecosystem,” Weeramunda explains.

DirectPay serves diverse businesses, both large and small, including other startups. “We help startups and other fintechs with the payment gateway because unless we collaborate, we cannot become a cashless society and drive financial inclusion fast enough,” Sasindu Pathiranage, the COO of DirectPay said. “We are working on opportunities to facilitate cross-border transactions digitally, inward and outward, through fintech innovations mainly based on blockchain technologies.”

Despite the burgeoning e-commerce industry, over 70% of e-commerce payments are cash-on-delivery. To break this mould, DirectPay enables e-commerce delivery partners to complete a card payment in under 30 seconds so that consumers can enjoy a seamless experience. “People are glued to their mobile phones, communicating, learning, being informed or entertained any time they want to, and with ease,” Pathiranage said. “We wanted to add payments to that list and eliminate the need to carry cash or a wallet.” The company derives considerable insights on consumer behaviour which informs product development at DirectPay.

“If you look at the credit card usage in the country, less than 5% of the population have credit scores, and this is one reason why PayPal is not interested in this market,” Pathiranage contends. “DirectPay is enabling the digital economy regardless, by providing the platforms, security, and the convenience that would delight consumers. We will work towards bridging the gap of PayPal not coming to Sri Lanka in the near future”.

For its ingenuity, LankaClear, Sri Lanka’s national payments network operator, recognises DirectPay as a significant partner and facilitator to the rollout of LankaClear’s national digital payment platforms JustPay and LankaQR. The DirectPay mobile app is now a fully-fledged application certified to carry out all scenarios of Central Bank’s newly implemented Lanka QR transactions.

“Our competitive advantage is that our application is available to customers for frequent and immediate access, anywhere and at any given time,” Pathiranage explains. “Moreover, payment transactions are not limited to customers of a particular bank but can be done via any bank available within the JustPay facility. We are proud of the fact that we not only provide the best solution but also charge the lowest commission rate from merchants in Sri Lanka”.

DirectPay is setting out to improve financial inclusivity and elevate the economy by leading the digital transformation. It is doing this with cutting-edge technology, and importantly, by grounding consumer experiences and interests at the heart of everything they do.

Merchants fundamentally want to secure their sales. But to grow their reach and market share, they can no longer depend on walk-in customers. If they wanted a loan to invest in their businesses, few merchants have transaction histories or credit records that would compel a bank to lend. “We are solving these problems by making merchants digitally enabled and also by making it convenient and secure for consumers to use digital channels to buy goods and services,” Pathiranage said.

DirectPay platform has built a merchant base of more than 7,000 vendors, offering digital payment solutions from internet payment gateways to mobile apps and point of sale systems.

“We don’t have generic, one-size-fits-all solutions. We develop a solution based on the unique expectations and needs of each business, and this something sets us apart from the rest,” Pathiranage adds.

DirectPay is also picky when it comes to selecting its clients. “We partner with large corporates because of the impact we can have, but when it comes to small businesses, we help micro merchants to have a growth strategy and this has helped us grow faster than any fintech’s in the market. We always believe, if our customers win, we win”

Its internet payment gateways enable secure transactions between customers and vendors without disclosing their financial details. The company is a specialist in multichannel merchant apps deploying the latest QR-based technologies allowing customers to process payments at their convenience with low rates. These apps accept static, dynamic and scannable QR, facilitate bill payments, government payments, merchant wallet facilities, including top-ups, and generate reports for decision-making purposes.

Its POS systems go beyond the boundaries of conventional POS systems by providing a digital basket of goods and services to merchants, thus making them digitally enabled. DirectPay POS terminals offer a wide range of additional features apart from electronic fund transfers.

DirectPay also has a virtual version of its POS offering: mobilebased POS solutions that accept remote card payments from a mobile device by simply sending out a payment link to the customer via email, SMS, or WhatsApp.

DirectPay also has a platform as a service solution for businesses enabling online and mobile payments used by some state banks, insurance, and telecommunication companies and other fintechs like OrelPay, NSBPay, PeoplesPay and Helios.

Weeramunda and co-founders Dinesh Karunathilaka and Sasindu Pathiranage share a vision to build a bank for a new age. “We are providing the underlying technology solutions for banks to be competitive in a digital age which will dawn sooner or later,” Weeramunda confers. “A decade from now, we will have banking, but banks, as we know them, may not be around anymore. Our generation will probably be the last to visit a bank to open an account”.

As consumers evolve and digital technology changes the world, Sri Lankan banks will have to wake up to this reality. Extensive branch networks will be too expensive to operate. Customers will demand services at their fingertips and unique experiences too. As the economy expands and consumer incomes improve, banks will have to capture a larger share of the transactions. However, it must also be able to support that kind of growth. So that is why we believe that a new bank, a digitally enabled bank, has exciting potential. And that bank, or finance house, is likely to be DirectPay.

We are providing the underlying technology solutions for banks to be competitive in a digital age which will dawn sooner or later