Central Bank of Sri Lanka: Fast Payments for Everyone — CEFTS Implementation in Sri Lanka

The rapid advancement of digital technologies has transformed the global payments landscape, with fast payment systems becoming a key driver of financial inclusion and economic growth. In Sri Lanka, the implementation in 2015 of its fast payment system, the Common Electronic Fund Transfer Switch (CEFTS), marked a significant milestone that steered the country's payment infrastructure towards enabling interoperability, innovation, and financial inclusion. Today, CEFTS processes the major share of interbank retail transactions, becoming a cornerstone in Sri Lanka’s transition to a fully digitalized economy.

While CEFTS has become a major payment system today, it was implemented within a context where state-of-the-art large value and retail interbank payment systems were efficiently providing real-time and same or next business day settlement, respectively for corporate customers, merchants, and individual bank customers. However, two distinctive attributes differentiated CEFTS from other retail payment systems.

The first distinctive attribute of CEFTS was that it enabled 24/7 real-time fund transfers across banks and other financial institutions. The other was its open, innovation-friendly architecture that supported the infrastructure to be extended into developing dynamic customer-centric payment methods, enhancing customer experience. Thus, by enhancing the accessibility and ubiquity of digital payments, CEFTS effectively addresses underserved and emerging customer needs. As a result, the share of interbank retail transactions through CEFTS increased from a mere 8% in 2018 (three years after implementation) to 67% of total transactions processed through interbank retail payment systems in 2024.

As digital payment adoption is influenced by socio-economic factors as well as the availability and efficiency of other systems in a country’s payment infrastructure, this article will first provide a brief overview of these contextual factors before examining the key features, performance, and latest developments of CEFTS. Finally, some key ...

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