LankaClear Drives Digital Transformation in Sri Lanka

LankaClear has been at the forefront of driving digital transformation in Sri Lanka, leveraging its expertise to create a more efficient and transparent economy. LankaClear is a state-owned company that has been instrumental in modernizing Sri Lanka's payment systems.

The company has implemented a range of initiatives to promote digital payments, including the introduction of a national payment switch. This has enabled real-time settlement of transactions and improved the overall efficiency of payment processing.

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LankaClear is a state-owned company in Sri Lanka, established in 2003 as a subsidiary of the Central Bank of Sri Lanka.

It was created to provide a secure and efficient electronic payment system for the country.

LankaClear's primary function is to act as the central counterparty for all interbank transactions in Sri Lanka.

This means that it settles and clears transactions between banks on behalf of its member banks.

LankaClear's main goal is to reduce the risk of non-payment and improve the efficiency of the payment system.

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It has been successful in achieving this goal, with the number of failed transactions decreasing significantly over the years.

LankaClear's services are used by all commercial banks in Sri Lanka, as well as other financial institutions.

It provides a range of services, including payment processing, account management, and risk management.

These services are essential for the smooth functioning of the country's financial system.

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LankaClear has successfully implemented digital transformation in the country's payment system, allowing for faster and more secure transactions.

The company's digital platform has enabled real-time payments, reducing the processing time from hours to seconds. LankaClear's digital transformation has also improved the efficiency of the payment system, with a 99.99% uptime rate.

The digital platform has also reduced the risk of fraud, with advanced security features such as encryption and two-factor authentication. LankaClear's digital transformation has made it possible for banks and other financial institutions to easily integrate with the payment system.

This has led to a significant increase in the number of transactions processed through the digital platform, with over 1 million transactions processed daily.

For another approach, see: Faster Payment System

LankaClear made history by launching the online transfer mode of the Cheque Imaging and Truncation System (CITS) in 2016.

The new system allows banks to transmit MICR data of physical cheques directly to LankaClear via a secure Virtual Private Network (VPN) with end-to-end encryption.

This replaced the previous practice of submitting MICR data on CD-ROMs, which was inefficient and time-consuming.

The online transfer mode of CITS was launched on October 18, 2016, with the participation of several member banks, including Hatton National Bank, Commercial Bank, and Standard Chartered Bank.

LankaClear's introduction of the online transfer mode of CITS brought down human intervention and inefficiencies in the cheque clearing process to a bare minimum.

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We're excited to announce the launch of our Payment Exchange, which enables seamless transactions between businesses and their customers. This feature is a game-changer for e-commerce sites and online marketplaces.

The Payment Exchange is integrated with our Direct Debit Authorization, allowing customers to securely link their bank accounts for easy payments. This authorization process is quick and straightforward, taking just a few minutes to complete.

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With the Payment Exchange and Direct Debit Authorization in place, businesses can now offer their customers a convenient and hassle-free payment experience. This is especially beneficial for subscription-based services and recurring payments.

The Payment Exchange also provides real-time payment processing, ensuring that transactions are processed instantly and reducing the risk of payment failures. This means that customers can enjoy uninterrupted service and businesses can focus on growing their operations.

Lanka Clear becomes the first in South Asia to launch CITS, a system that transforms the domestic interbank cheque clearing process by eliminating the physical presentation of cheques.

This innovation was made possible with Central Bank supervision and was launched in 2006, making Sri Lanka the first country in South Asia to successfully roll out a sophisticated system like CITS.

The initial CITS launch eliminated inefficiencies associated with physical cheque presentation, saving time and reducing processing costs.

Broaden your view: Cheque Clearing

However, banks still had to submit MICR data of physical cheques saved onto CD-ROMs and delivered to LankaClear on a daily basis, which is now being replaced by a more efficient online transfer mode.

The new Online Transfer Mode of CITS allows banks to transmit MICR data of physical cheques directly to LankaClear via a secure Virtual Private Network (VPN) with end-to-end encryption.

This online transfer mode was launched on October 18, 2016, with the participation of several member banks, including Hatton National Bank, Commercial Bank, Cargills Bank, Standard Chartered Bank, and NDB.

LankaClear's introduction of the Online Transfer Mode of CITS marks a significant stride in the payment and settlement arena, further improving the cheque clearing cycle and customer experience.

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