📈 Digital Frontier: Sri Lanka’s Shift Toward Cashless Tourism

Sri Lanka is at a critical juncture in digitizing its tourism economy. Despite strong 2026 arrivals—exceeding 223,000 in early January—a significant "paperweight" remains as the retail and transport sectors resist cashless transitions. • Economic Landscape & Informal Sector • An estimated 40% of Sri Lanka’s GDP remains informal and "off the books." • Cashless transactions in the retail sector hover at just 20-25%, far behind regional competitors like Thailand and Vietnam. • Approximately 30-35% of the adult population lacks a bank account, hindering basic financial inclusion. • Barriers to Digital Adoption • High Processing Fees: Global cards (Visa/MasterCard) charge vendors 1.5%–3.5%, eroding thin profit margins. • Tax Anxiety: Vendors fear digital footprints will invite complex tax audits and para-tariffs. • Infrastructure Gaps: While digital literacy is fair, internet penetration lags behind tourism rivals. • Sector Highlights & Solutions • Apparel & Textiles and ICT/BPM sectors continue to lead formalization, but the tuk-tuk and SME tourism segments face "predatory pricing" and scams due to lack of transparent digital records. • LankaQR and Just Pay are existing tools that could emulate India’s UPI success, which handles 50% of global real-time retail transactions. • The proposed Unique Digital ID offers a foundation for a national Digital Payment Wallet to unify the tourism experience.