COLOMBO – In a landmark move set to transform Sri Lanka’s digital economy, the government has announced that starting May 15, citizens and businesses will be able to receive money directly into the country via PayPal, one of the world’s leading online payment systems.
The decision follows years of persistent requests from the local business community, IT professionals, and freelance workers, and marks the removal of long-standing legal and technical barriers that had previously prevented direct PayPal remittances to Sri Lanka.
Project in Final Stage
Sri Lanka has entered the final stage of enabling inward remittances through the global payment giant. Progress has been made through collaboration between private banks, PayPal, and its parent company, with the Central Bank indicating the initiative is nearing completion.
While no official announcement has yet been issued, consultations with Central Bank officials overseeing bank supervision and payments have confirmed that progress has been made, and the project is now in its concluding phase.
End of Proxy Addresses and Informal Channels
The move is expected to bring significant relief to small and medium-scale enterprises (SMEs), particularly internet-based service providers and freelancers, who have long relied on fake foreign addresses or informal money transfer methods to receive payments from overseas clients.
The absence of a Sri Lankan address option had previously compelled many local entrepreneurs to use foreign or proxy addresses to open overseas accounts, leading to a loss of valuable foreign exchange inflows. Under the proposed framework, transactions will fall fully under the regulatory oversight of the Central Bank of Sri Lanka, ensuring transparency and greater convenience for users. The Ministry of Digital Economy, the Central Bank, and the country’s private banking system have worked together over the past months to resolve prior obstacles.
Boosting Forex and Tax Compliance
Once operational, the system will allow freelancers and digital entrepreneurs to receive payments directly into their local bank accounts, increasing the volume of official foreign exchange flowing into the country.
Informal remittance channels such as Undiyal continue to operate, but the new PayPal-enabled mechanism is expected to encourage a shift toward formal, government-recognised platforms. This would also enable proper tax compliance on earnings, creating additional revenue benefits for the state while strengthening foreign exchange inflows.
A New Leap for Digital Commerce
Economic analysts have hailed the May 15 launch as a new leap forward for Sri Lanka’s digital commerce sector, providing a regulated, transparent, and efficient payment gateway for the country’s growing online workforce.
With the system set to go live in just over a week, Sri Lanka joins a growing list of nations benefiting from seamless, direct PayPal integration, marking a pivotal moment for the nation’s digital economy and foreign exchange landscape.