Agriculture is the backbone of most of the developing countries in which a major part of their income comes from agriculture sector and more than half of their population depends on it for their livelihood. The current global population is nearly 7.7 billion with 50% living in Asia. A large proportion of those livings in developing countries face daily food shortages as a result of environmental impacts or political instability, while in the developed world there is a food surplus. For developing countries, the drive is to develop drought and pest-resistant crops which also maximize yield. In developed countries, the food industry is driven by consumer demand which is currently for the fresher and healthier food products.
Specifically in agriculture, technical innovation is of importance with regard to addressing global challenges such s population growth, climate change and the limited availability of important plant nutrients such as phosphorus and potassium.
Nanotechnology has gained intense attention in the recent years due to its wide applications in several areas like medicine, medical drugs, catalysis, energy and materials. Those nanoparticles with small size to the large surface area (1-100nm) have several potential functions. These days, sustainable agriculture is needed. The development of nonchemical has appeared as promising agents for the plant growth, fertilizers and pesticides. In recent years, the use of Nano materials’ has been considered as the alternative solution to control pant pests including insects, fungi and weeds.
Despite these potential advantages, the agricultural sector is still comparably marginal and has not yet made it to the market to any larger extent in comparison with other sectors of nanotechnology application.
Nanotechnology helps agricultural sciences and reduce environmental pollution of pesticides and chemical fertilizers by using the nano particles and nano capsules with the ability control or delayed delivery, absorption and more effective and environmentally friendly and production of nano -crystals to increase the efficiency of pesticides for application of pesticides with lower dose.
In the agricultural sector, nanotech research and development is likely to facilitate and frame the next stage of development of genetically modified crops, animal products inputs, chemical pesticides and precision farming techniques. The use of nanotechnology in agriculture has been mostly theoretical but it has begun and will continue to have a significant effect in the main areas of the food industry development of new functional materials, product development and design of methods and instrumentation for food safety and bio-security.
The world is ever evolving and advancing towards a digital eco-system. With that, digital banking will play a crucial role in increasing efficiency and convenience in this fast moving world. It also has the ability to increase financial inclusivity, and motivate engagement in economic activity. Therefore, the development and promotion of a digital payment eco-system should be at the fore-front of a developing country.
The Central Bank of Sri Lanka named 2020 as “The Year of Digital Transactions”, understanding the importance of enriching the digital payments ecosystem. The Central Banks has taken a giant leap forward in the digital payments spectrum introducing LankaQR, a national QR payment technology.
BiZnomics spoke to the Director for Payments and Settlements at the Central Bank of Sri Lanka, Dharmasri Kumaratunge, to find out more on how LankaQR empowers the digital payments eco-system of Sri Lanka, making it a nationwide experience.
What was the setting that led up to LankaQR?
Sri Lanka is gradually transitioning into a digitalised economy. In this transition process, the Central Bank of Sri Lanka set out to champion a digitalised national payments system in order to streamline financial inclusivity and a less-cash society. The Central Bank recognizsed the lack of low-cost, secure digital payment methods for Sri Lanka’s small and medium merchants and the general public. We identified QR technology to be the most viable solution for this problem, while also realizing the importance of having one interoperable national QR code, taking in to account the experiences of other countries. Therefore, the Central Bank together with LankaClear (Pvt) Ltd., which is the national payment infrastructure provider, and banks came together and developed an interoperable national QR code standard, under the name of LANKAQR. The LANKAQR is a national QR code standard, whereby all payments made using the LANKAQR code that comply with the LANKAQR standard, enables customers to pay instantly from their bank accounts into a bank account of a merchant, who may be a customer of any other bank.
Walk-us through what QR technology is and how LankaQR works?
A QR code (which stands for ‘Quick Response’) is a form of barcode that is comprised of a matrix of dots. It can be scanned using a QR scanner or a smartphone with a built-in camera. Once scanned, software on the device converts the dots within the code into numbers or a string of characters, which would form a command based on the purpose of the QR code. For example the QR code received by merchants, when scanned, will command the device to initiate the digital payment to the relevant merchant, confirming the payment information. All licensed banks, licensed finance companies and licensed operators of Mobile Phone-Based E-Money Systems, who offer QR Code based payment solutions, are required to onboard merchants onto LankaQR. This enables money to be transferred between any two financial institutions, thereby increasing efficiency. The merchant will be provided a sticker with their own unique QR code, which can confirm payment information. Now the merchant is able to accept digital payments through a mobile phone. The customer is simply required to scan the code through their mobile phone camera. This will allow them to make a payment to that merchant through the payment app of any bank that they are currently using.
How will QR technology lead us towards a less cash economy while empowering the small merchants?
The spread of the COVID-19 virus has made the general public more aware of the risk of viruses spreading through the exchange of notes and coins. Further, the cost of issuing new currency to the economy stands at an estimated Rs.3.2 billion yearly, excluding processing charges/storage and destruction of money. These factors along with the need to increase efficiency in payments makes a less cash society a priority for a developing nation.
Our data shows there are over 23 million debit cards and 1.8 million credit cards in use, however there are only 83,000 Point of Sales (POS) machines being used in the entire island. The high cost of these POS systems and high Merchant Discount Rates (MDR) creates a barrier for small merchants to enter into the digitalizsed payment network, and they are forced to transact in cash. Currently a POS machine costs between Rs.50,000 to Rs.70,000, and Merchant Discount Rate vary between 2% to 3.5%, on top of which there may be an monthly rentals.
However since QR technology uses a simple sticker there is no initial cost for the merchant to enter the payment network. The Central Bank has also regulated the Merchant Discount Rate charged by banks at 1%, making it much more attractive compared to traditional POS systems. As a further incentive for merchants, we reduced the MDR down to 0.5% for 2020 and are hoping to further hold that rate for the first half of 2021.
The Central Bank has also decided that payments made to Government entities, such as water and electricity bills will not be charged the MDR. We believe LankaQR will empower small and medium scale merchants’ , making sure they are not left behind as Sri Lanka becomes digitalised.
How has the Central Bank spread awareness on the digital payments eco-system?
It has been identified that the awareness and usage of digital transactions is very low in Sri Lanka. Currently, Sri Lanka has a highly cash-based economy. Although the literacy level of the country is high, financial literacy is comparatively low. Even though the mobile phone penetration is high in Sri Lanka, the use of the mobile phones for digital payments is low. Further, the wasting of time and money by way of waiting in queues, travelling to cities/bank branches/particular shops for making payments such as utility payments, government payments etc. could has been observed. Furthermore, employees of financial institutions are not aware of their own products, and are not knowledgeable on the use of existing facilities to make digital transactions.
Sri Lanka is currently in the midst of a waste crisis with landfills running out of space and the costs of disposal spiralling rapidly. A recent report by the WWF named Sri Lanka as the fifth largest contributor to marine plastic pollution and the level of recycling in Sri Lanka in particular for plastics falls well below global averages.
The Sri Lankan economy on the other hand, continues to suffer from a significant balance of trade deficit and a weakening rupee in part due to imports for raw materials such as plastics, aluminium, paper/cardboard and electronics. Finding a way to increase the domestic ability to sort and recycle these materials for re-use in a circular way may in fact provide a solution for both the environment and the economy.
A linear economy, which typifies most products and materials here in Sri Lanka, is one whereby products are manufactured, used and then disposed of as waste. A circular economy by contrast, is one that aims to eliminate waste through the continual use of resources by reusing, repairing, refurbishing, remanufacturing and recycling raw materials and products at the end of their usable lives. This therefore closes the loop on the manufacturing process thereby reducing the need for new materials.
The waste problem is not just limited to the Sri Lankan economy as materials such as plastics do not biodegrade and therefore will continue to exist until a solution is found. Plastic breaks down into what is known as microplastics after some time which significantly harms the environment as animals ingest this and toxins from the material itself seep into the water table. Recent studies suggest that we are ingesting the equivalent of one credit card every week. The health impacts of the plastic epidemic are likely to grow significantly.