The Central Bank of Iran on Wednesday unveiled an instant payment system, which is set to replace the apparently insecure but popular card-to-card money transfers.
According to Mehran Moharramian, the CBI deputy governor for innovative technologies, the new mechanism is similar to the card-to-card transfers.
"Users will have to provide bank a/c number(s) for transfer instead of bank card numbers, which is more secure," CBI website quoted him as saying.
Bank card numbers are like sensitive information better kept private, whereas bank account numbers can be easily shared. "It was crucial to replace the card-to-card method with something that allows the CBI to [better] supervise bank transactions."
Development of the instant payment platform is in accord with global standards, he noted.
According to Moharramian, the new payment system is an interbank platform operating under CBI auspices and handles instant payments in large and small amounts 24/7.
Using the system, users can transfer up to 150 million rials each day, which is considerably higher than the daily cap for card-to-card transactions.
The system also has other advantages like reducing payment costs, detecting fraud and expanding the scope for innovative products, he added.
Banks are allowed to offer instant payment services through three main channels, namely internet bank platforms, mobile applications and their branches.
Promoting Fintechs
"The system is designed in a way that it will be available for fintech developers in the future. However, inclusion of fintech startups is not a priority at this stage."
According to the CBI, instant payment transaction are available in Bank Melli, Ayandeh Bank, Bank Saderat, Keshavarzi Bank, Parsian Bank, Saman Bank, Dey Bank, Cooperatives Development Bank, Bank Pasargad Iran, Tourism Bank, Sarmayeh Bank, Bank of Industry and Mine, ENbank, Sina Bank, Bank Maskan, Shahr Bank, Post Bank Iran, Iran Zamin Bank and Middle East Bank.
Under the existing card-to-card system the amount is transferred to the receiver’s card instantly and the CBI completes the processing and clearing at the end of each business day.
Iranian banks on average process 450 to 500 million interbank transactions a month.
Card-to-card transactions are handled by the CBI's SAHAB platform. SAHAB is a card-based fund transfer system connected to SHETAB (the national interbank network) center, allowing customers to send money to any SHETAB-member bank using their own cards.
The instant payment completes the ecosystem of account-based transactions. Customers can transfer up to 1 billion rials a day without referring to [other] branches. Large transactions are being handled by SATNA and the new system will cover transactions from 150 million to one billion rials.
SATNA, internationally known as Real Time Gross Settlement, was created in 2006 for high-value interbank transaction settlements and started accepting inter-customer transactions from 2008.
