Page 38 - IRANRptDec19

Ambassador Dzhagaryan reportedly once again outlined the plan in a meeting with Iranian officials.
Teething problems in achieving the required connections have been diagnosed according to Iranian Informatics Services Company. It claimed Russia would not move ahead with the plan until Iran upgraded certain banking practices. The key issue appears to be Iran’s payments process. It uses the ‘swiping’ method combined with PIN codes, whereas the Russian process uses the far more international ‘chip and PIN’ approach.
So far, only a handful of ​Iranian banks have invested in chip and pin technology​. ​They include Bank Shahr “City Bank” and Bank Mellat. Iranian retailers, meanwhile, still have little knowledge of the system.
"The Russians believe that as banking cards in Iran are mostly magnetic and less secure than Russian cards, in the event of counterfeit cards, Iran will suffer the damage, and thus have to pay the costs,” Abutaleb Najafi, the director of Iranian Informatics Services Company, was quoted as saying.
8.1.6 ​Bank news
Digital payments in Iran up 27% in fifth Persian month
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.
The most popular PSP in Iran is Asan Pardakht. It enables users to transfer funds from card-to-card, pay bills with the use of barcodes and QR codes and
38​ IRAN Country Report​ December 2019 www.intellinews.com