Page 35 - IRANRptOct19

Digital payments in Iran up 27% in fifth Persian month
Back in 2017, Bank Melli Iran, the second oldest Iranian financial institution, opened its first branch in the holy city of Najaf to deal with the thousands of pilgrims who visit from Iran annually.
With Iranians struggling to get hold of foreign currency inside Iran due to financial restrictions brought in amid the economic disruption caused by US sanctions, the bank found a market opening in providing foreign exchange services at the tourist destination.
Despite the heavy US sanctions imposed on Iran, Iranian trade with Iraq has continued apace. Some of it, such as the export of electricity and gas to the Iraqis, is accepted by the US Trump administration. Around 1,400 MW of power and 28mn cubic metres of gas that arrive in Iraq from Iran annually is indispensable to the Iraqis for want of alternatives. Iran uses money earned from these exports to purchase goods in or via Iraq.
Iraq remains the ​biggest buyer of Iranian products both on the official and unofficial markets​, while Iran uses Iraq as a workaround for different products it desires to import but cannot bring in directly because of sanctions.
Re-exports to Iran from Iraq have long been used to make available to Iranians items such as Kia, Hyundai and Samsung products.
The Central Bank of Iraq, meanwhile, ​pays lip service to Washington with moves such as the banning of the export of dollars to Iran​.
Iranians are using domestically developed digital payment methods more than ever. Growth in the use of such methods was reportedly up 26.79% y/y and 10.64% m/m in the fifth Persian calendar month (ended August 22), according to Tehran’s ​Financial Tribune.​
Iranian banking authorities, which are unable to develop usual links to international payment gateways given US sanctions, have developed the Shaparak system. Introduced over a decade ago, it has helped card payment terminal, mobile phone and online payments take off in Iran.
Inflationary pressure in Iran brought about by the American sanctions regime has likely driven increased use of networked payments, with cash settlements becoming impractical due to fast-increasing prices.
Overall some 83.66% of transactions in the analysed month were classified under “purchasing of goods and services”. The category showed annual growth of 2.67% y/y. It was followed by “bill payments” at 11.66% of transactions.
In value terms, transactions for purchasing goods and services took a 97.3% share.
8.2 ​Central Bank policy
Central bank clears developed-in-Iran payments app Digipay
Developed-in-Iran payments service provider (PSP) app Digipay has been given the green light for operation by the Central Bank of Iran (CBI), according to ItMen.ir.
The app uses the familiar typography of the so-called “Iranian Amazon”, domestic e-commerce giant DigiKala. It was launched by the parent investment company behind DigiKala, Sarava Pars,
DigiPay is one of a growing number of digital payment solutions developed in Iran taking advantage of a government push to move away from traditional cash payments.
“All daily and routine transactions performed by end-users of all types of e-payments can be integrated into the Digipay integrated ecosystem for a seamless experience for all small payments including C2C, paying bills, account top-ups and more,” the application’s website says.
35​ IRAN Country Report​ October 2019 www.intellinews.com