I was there a few weeks ago and my bank (Ally) flagged my card even though I told it I was going there. I had to call Ally once I was there and tell it the withdrawals were legit before I could take money out. After that, I had no problems. Around Galle and Tangalle there were enough ATMs that I had no problems.

I also had no problems using Visa at major establishments (just be realistic... don't expect to go to the local market and pay the lady selling vegetables with plastic...).