Banks, customers to benefit:

CPS system will make Lanka a regional economic hub - Lanka Clear Head of Operations

Ramani Kangaraarachchi

"Higher liquidity in the payment and settlement system of Sri Lanka will induce rapid economic activity and assist the Common Payment Switch (CPS) system.

This would assist Sri Lanka to realize its goal of being a regional economic hub," Head of Operations Lanka Clear (Pvt) Ltd, Harsha Wanigatunga said.

He was making a presentation on "CPS The Way Forward" at a function at the Ceylon Continental Hotel, recently.

Harsha Wanigatunga

Wanigatunga said that high liquidity, secure transactions and instant payment realization in the payment and settlement system is essential to fast track economic development and to induce high economic activity. The Monetary Board of the Central Bank has given approval to Lanka Clear to own and operate this switch identifying this need.

The CPS framework will create the infrastructure required for a payment super highway in Sri Lanka to enable future development in the banking sector, such as eCheques, integration of payment modes such as mobile cash card integrated POS systems and ATMs.

This will result in creating an explosion in the payments and settlements industry in Sri Lanka, which will place Sri Lanka as a global leader or at least a regional leader, he said.

Some of the main advantages that bank customers will benefit from CPS would be faster realization of inter-bank payments via secure transactions that have multiple access points to ATMs, internet banking and mobile banking and 24x7 access to banking services.

Wanigatunga said that Sri Lanka already has a technically savvy community as evident from the mobile and sms penetration in all demographics and regions. With the introduction of this online, real-time payment system where the payment is realized there will be an explosion of usage given its ease of use and the high security of each transaction, he said.

Referring to the benefits to banks through the CPS system, Wanigatunga said that it will help banks in three major areas. They are higher operational efficiency, greater revenue generating capabilities and cost savings and Hi-Tec capabilities.

In terms of higher operational efficiency the banks will benefit immensely by lowering its operational overheads by eliminating the manual work and errors induced due to most processes being manual in the current operations. CPS will help banks to create new products and thus significantly increase the "Top Line", as well as the margins, he said.

The banks can also take advantage of creating an efficient salary payment system that has a potential market of 4.5 million transactions a month, apart from the third party payments, bill payments, direct debits, card based POS payments, local credit cards inward remittances and statutory payments, he said.

Since CPS is an online real-time system the banks will have access to standard or customized reports, transactions status liquidity positions and it will integrate seamlessly to the existing banking systems, while making each transaction more secure and reliable. Essentially, banks will get a future proofed online, real time payment system for a very low Total Cost of Ownership. (TCO), according to Wanigatunga.

Wanigatunga said that the currently system is in its implementation stage and is scheduled to be fully operational in mid May.

CPS is a joint initiative by the Central Bank of Sri Lanka, banks and Lanka Clear.