Thematic Area: Poverty and Vulnerability
Across South Asia, governments are increasingly promoting digital payments as a core pillar of digital public infrastructure (DPI), financial inclusion, and economic formalisation. The transition towards a less-cash economy is expected to improve efficiency, transparency, and access to financial services, particularly for micro and small enterprises (MSEs), which account for a significant share of employment and day-to-day economic transactions. However, evidence suggests that while digital payment infrastructure is expanding rapidly, merchant-level adoption, especially among micro and informal enterprises, remains uneven and constrained by a range of factors.
As in other South Asian countries, Sri Lanka has actively promoted digital payments as part of a broader agenda for payment system modernisation and digital transformation of the financial sector. Some of the key initiatives include the introduction of mobile wallets, bank-based payment applications, and a national interoperable QR standard. The MSEs now have access to a wide range of digital payment options, including mobile wallets, QR codes, and app-based payment solutions. However, existing research and policy discussions across South Asia often focus on infrastructure development, consumer adoption, and financial access, with limited systematic attention to the merchant side of the digital payment ecosystem.
This study seeks to address this gap by examining both the supply-side features of digital payment solutions and the demand-side readiness, constraints, and perceived benefits among MSEs.
