"Mobile Money technology will transform the way we transact cash and will enable electronic money interchange and electronic payments to be brought within the reach of every Sri Lankan citizen," Hans Wijayasuriya, head of Dialog Axiata said.
Dialog is the first operator to be licensed by Sri Lanka's central bank to make mobile payments.
"The dawn of the mobile money era in Sri Lanka has been made possible by the progressive, and financial inclusion focused, regulatory ethos of the Central Bank of Sri Lanka," Wijayasuriya said.
"In this respect Sri Lanka’s payments and settlement legislation and Mobile Payment regulations stand among the most progressive in the world."
Customers could load cash from 10,000 outlets around Sri Lanka to their 'eZ Cash' branded mobile account or transfer money from an internet banking account.
They could also withdraw up to 10,000 rupees a day from the outlets with the cashier being a human teller, Wijayasuriya said. The same network of dealers that are now doing mobile top ups for prepaid phone customers would offer the mobile wallet service.
All registered Dialog customers could open a 10,000 rupee wallet through the phone with no additional documentation and no registration fee. An account with a 25,000 rupee balance would need additional verification.
The mobile payment can be used to pay utility bills or to buy goods and services online or even make over the counter payments at thousands of shops across the island, Fariq Cader, head of Dialog's e-ecommerce service said.
Money could also be transferred to another wallet holder.
Wijayasuriya said people without credit cards could now make electronic transaction even without a bank account and money transfer fees was lower than any other competing service at 15 rupees a deal.
Hatton National Bank will be the custodian bank for the money in the accounts and ensure regulatory compliance.
Cader, each transaction was protected through a personal identification number (PIN) and in the case of online payments the user will get a prompt on the phone to confirm.
Without a PIN a lost phone could not be used for transactions.