Key Facts for Sri Lanka
- Primary real-time rails: Common Electronic Fund Transfer Switch (CEFTS), JustPay
- Typical settlement times: Real-time
- Common limits: The per-transaction maximum is Rs. 5 million; daily aggregate limits vary by institution.
What “real-time payments” means in Sri Lanka
In Sri Lanka, real-time payments are defined as instant, 24/7 fund transfers between financial institutions, processed through the Common Electronic Fund Transfer Switch (CEFTS). The system’s scope is extensive, covering both peer-to-peer and corporate payments up to Rs. 5 million across various platforms like mobile banking, ATMs, and online portals. While a specific legal definition is not codified, the entire framework operates under the strict guidance and supervision of the Central Bank of Sri Lanka, which sets transaction limits and operational standards.
The Central Bank of Sri Lanka is the lead regulator, providing oversight for the nation's payment systems. The primary operator is LankaPay (Pvt) Ltd., which also serves as the main clearing house for interbank retail payments. Final interbank settlements from CEFTS are processed through the country’s Real-Time Gross Settlement (RTGS) system, which was upgraded to become ISO 20022-compliant in 2024. By implementing its system in 2015 and fostering high adoption, Sri Lanka has established a payments infrastructure that is competitive with its international counterparts.
Payment Rail Overview
Common Electronic Fund Transfer Switch (CEFTS)
Introduced in 2015, CEFTS is Sri Lanka's core real-time payments infrastructure, facilitating 24/7 fund transfers between financial institutions. It functions as a central switch for payments initiated from various channels like mobile banking, ATMs, and online portals. Interbank obligations are cleared through CEFTS and settled in batches via the country's RTGS system.
- 24/7 Availability: Operates around the clock, including weekends and holidays, for instant transfers.
- Multiple Access Channels: Supports payments through internet banking, mobile apps, ATMs, and over-the-counter services.
- High Transaction Limits: Allows individual transfers up to Rs. 5 million, with higher limits for government payments.
- Open Architecture: Built with an innovation-friendly design that supports the creation of new payment products.
Pros:
- High adoption, accounting for 67% of interbank retail transactions by 2024.
- Supports a competitive ecosystem of third-party payment applications.
- Drives financial inclusion by making digital payments more accessible.
Cons:
- Transaction fees apply, although they are regulated by the central bank.
- Cash remains a dominant payment method in the broader economy.
- The older SLIPS system is still frequently used for bulk payments.
JustPay
Launched in 2018, JustPay is a platform built on the CEFTS network that allows certified mobile and web apps to link directly to user bank accounts. It is designed to support pull-based transactions, making it ideal for merchant payments and in-app purchases. In 2024, its functionality was expanded to web browsers, further integrating it into e-commerce.
- Account Linking: Permits users to connect multiple bank accounts to a single payment application for convenience.
- Pull Transactions: Authorizes merchants and applications to request funds from a user's account, which is fundamental for QR and in-app payments.
- Third-Party Innovation: Opens the market to non-bank fintech companies, which can build and offer their own payment services.
- Web Integration: JustPay Web extends its payment capabilities to browser-based e-commerce platforms.
Pros:
- Fosters a competitive market with dozens of apps from both banks and fintechs.
- Lowers transaction costs for merchants compared to traditional card payments.
- Integrates directly with the LANKAQR standard for broad interoperability.
Cons:
- Third-party apps face lower peer-to-peer transaction limits of Rs. 50,000.
- Requires all participating applications to complete a formal certification process.
LANKAQR
Introduced in 2018, LANKAQR is the national standard for Quick Response codes, creating a unified and interoperable payment system across the country. Based on EMV specifications, it ensures that any LANKAQR-certified app can pay any merchant displaying a LANKAQR code. All transactions are processed through the JustPay and CEFTS payment rails.
- National Standard: Establishes a single, interoperable QR code specification for all providers, eliminating fragmentation.
- Low Merchant Cost: Merchants have no setup costs and can receive payment confirmations via SMS on basic feature phones.
- Cross-Border Compatibility: Integrates with international payment networks in China and India, allowing tourists to make payments easily.
- App Agnostic: Works with any certified payment app, meaning customers are not locked into a specific provider.
Pros:
- Highly inclusive design supports merchants who lack smartphones or expensive POS terminals.
- Reduces merchant costs and reliance on cash for payments.
- International integrations make it valuable for the tourism industry.
Cons:
- Adoption has been gradual and requires continued promotional efforts to gain wider use.
- Building user trust and overcoming low digital literacy remain significant hurdles.
LankaPay Online Payment Platform (LPOPP)
Launched in 2017, LPOPP is a specialized platform operating on CEFTS for government agencies with automated systems. It allows citizens and businesses to make payments directly from their online banking portals. The system is designed for high-value transactions and provides instant reconciliation using unique reference numbers.
- Instant Reconciliation: Automatically matches payments to government invoices or services, removing manual work.
- High Transaction Limits: Supports large payments up to Rs. 20 billion, making it suitable for corporate taxes and customs duties.
- Direct Bank Integration: Leverages existing online banking portals, providing users with a familiar and trusted payment channel.
Pros:
- Greatly improves the efficiency of government revenue collection, processing over 40% of it in 2024.
- Its high transaction limits are ideal for large corporate and government-related payments.
Cons:
- Its use is restricted to government agencies that have already automated their backend systems.
GovPay
GovPay was introduced in February 2025 as an extension of the LPOPP/CEFTS framework. It is designed for government institutions that have not yet digitalized their databases. The platform records payments in real-time but requires manual reconciliation at the end of the day.
- Real-Time Recording: Logs all payments instantly, providing immediate confirmation to the payer.
- Transitional Solution: Acts as a bridge for government bodies that are not yet fully digitalized, allowing them to accept digital payments.
- Scalable Onboarding: Launched with 16 institutions, with plans to add more throughout the year.
Pros:
- Allows less technologically advanced government departments to accept digital payments.
- Serves as a stepping stone for institutions to eventually migrate to the fully automated LPOPP.
Cons:
- Requires manual end-of-day reconciliation, which is inefficient.
- Its utility is temporary by design, as the goal is for institutions to adopt fully automated systems.
Limits, Fees, and SLAs
- Limits: The standard per-transaction cap is Rs. 5 million, but limits vary by product from Rs. 50,000 to Rs. 20 billion.
- R2P Fees: Transaction fees are regulated by the Central Bank, with maximum charges of Rs. 25 for mobile banking and Rs. 100 over-the-counter.
- Operating Hours: The CEFTS network and its associated services, including request-to-pay, operate 24/7/365 with no specified cut-off times.
Compliance and Risk
KYC/KYB & AML
Sri Lanka's financial sector operates under strict compliance rules from the Central Bank and the Financial Intelligence Unit. These regulations mandate robust customer identification, verification, and ongoing monitoring to prevent financial crimes, applying to all institutions within the ecosystem.
Data Residency & Privacy
All businesses must comply with the Personal Data Protection Act. This legislation dictates requirements for data localization, secure storage of personal and transaction information, and specific protocols for notifying authorities and individuals in the event of a data breach.
Fraud Controls
Regulatory oversight focuses on system integrity through security standards like PCI-DSS and application-level certifications. A key component is the mandatory reporting of suspicious transactions to the Financial Intelligence Unit, which helps authorities monitor and act on potential illicit activities.
Recordkeeping & Audits
Financial regulations require that all customer identification data, transaction histories, and compliance-related documents be maintained for a minimum of six years. Institutions must also establish an independent audit function to test the effectiveness of their compliance systems.
Lightning Network Integration as a Solution
The Lightning Network is a second-layer protocol built on Bitcoin that processes transactions off-chain through a network of payment channels. This design allows for instant, low-cost payments. It complements domestic RTP rails by providing a global, decentralized payment layer that operates beyond national borders, filling a critical gap for international commerce and remittances where local systems are confined.
While its near-instant settlement speed is comparable to modern RTPs, the Lightning Network’s cost efficiency is far greater, with fees of just fractions of a cent. The primary distinction is its reach; whereas domestic rails are limited to a single country’s banking system, the Lightning Network offers truly global accessibility, connecting users worldwide without intermediaries.
- Cross-Border Complexity: It bypasses the high fees, slow settlement, and multiple intermediaries typical of international bank transfers, making global payments direct and efficient.
- Reliance on Banking Infrastructure: The network is open and permissionless, providing financial access to anyone with an internet connection, including unbanked populations who cannot access traditional RTP systems.
- Centralized Control and Limits: Unlike domestic rails with centrally-managed transaction caps, Lightning Network capacity is determined by channel liquidity, offering greater flexibility without needing approval from a governing body.
Integrating the Lightning Network offers a direct path to participating in a truly global, open financial system.
B2B Enterprise Use Cases
- Global Supplier Payments – A business pays international invoices instantly over the network, with suppliers receiving final settlement in seconds.
"Business value:" Eradicates cross-border transfer delays and costly intermediary bank fees. - Real-Time Merchant Settlement – A retail operation accepts customer payments and receives the funds immediately, bypassing multi-day card settlement cycles.
"Business value:" Improves cash flow with instant access to revenue and minimal processing costs. - Corporate Treasury Management – A multinational corporation moves liquidity between its global accounts 24/7 to fund operations without waiting for banking hours.
"Business value:" Provides continuous, worldwide liquidity management and reduces reliance on traditional banking systems. - International Payroll – A company pays its global remote workforce and contractors with instant, low-fee transactions accessible anywhere.
"Business value:" Simplifies global compensation and gives workers immediate access to their earnings. - Machine-to-Machine Micropayments – Autonomous devices or IoT sensors automatically pay for data or services in small, real-time increments.
"Business value:" Creates new automated economies for connected devices and pay-per-use services.
Cross-Border Transactions and Remittances to Sri Lanka
Cross-border real-time payments are difficult due to regulatory friction and the architectural challenge of connecting separate national systems—a process known as rail bridging. Reaching Sri Lanka involves navigating complex foreign exchange (FX) paths, which often come with high costs and slow processing times. These barriers push many transactions toward traditional banking or informal channels, undermining the goal of instant, low-cost settlement. The country’s prohibition on financial institutions processing crypto-related payments adds another layer of complexity for international trade and remittances.
- India: As a major trading partner, this corridor sees high transaction volume. However, regulatory restrictions force businesses to use traditional banking systems, which are slower and more expensive for settling international invoices.
- China: This corridor is defined by inbound tourism, with LANKAQR’s integration with UnionPay allowing Chinese visitors to make instant retail payments. Merchants receive funds instantly, which supports the local economy.
- Middle East: This is a vital corridor for personal remittances from a large migrant workforce. A comprehensive analysis shows funds are typically sent via banks and money transfer operators, often incurring high fees and facing competition from informal channels.
The Lightning Network provides a global alternative, processing payments instantly for fractions of a cent. By operating outside of traditional banking infrastructure, it bypasses intermediary fees and multi-day settlement delays, making international transactions both faster and substantially more cost-effective for everyone involved.
How Lightspark Makes Integration Easy
Lightspark helps fintechs, digital banks, wallets, and exchanges integrate with the Lightning Network by abstracting away its operational complexities. Our platform manages the difficult parts of the process, including dynamic liquidity, optimized payment routing, and built-in compliance screening. With our comprehensive developer tooling and APIs, you can connect to a global payment network and achieve sub-second settlement globally without becoming a protocol expert. If you are building the future of payments, we can accelerate your path to market. Talk to our team to get started.
Sources and Further Reading
- https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/statistics/otherpub/information_series_note_20250224_fast_payments_for_everyone_cefts_implementation_in_srilanka_e.pdf - Central Bank report on CEFTS.
- https://www.ilo.org/publications/comprehensive-analysis-remittances-sri-lanka - Analysis of Sri Lanka's remittances.
- https://www.lankapay.net/en/for-you/real-time-payments-cefts - LankaPay's CEFTS real-time payment system.
- https://www.lightspark.com/contact - Contact the Lightspark sales team.
- https://www.lightspark.com/knowledge/how-the-lightning-network-is-transforming-bitcoin - Transforming Bitcoin with Lightning Network.
- https://www.lightspark.com/knowledge/is-crypto-legal-in-sri-lanka - Crypto's legal status in Sri Lanka.
- https://www.lightspark.com/knowledge/what-does-the-lightning-network-do - Explaining the Lightning Network's purpose.
- https://www.lightspark.com/news/insights/what-are-lightning-payments - An introduction to Lightning payments.
