The Central Bank of Iran is set to unveil the first electronic check by early November, the CBI bank governor said.
"We are finalizing innovative solutions for digitalizing financial services and procedures. Electronic checks are to be issued in two weeks," Ali Salehabadi was quoted as saying by the CBI website.
He did not provide details on the features of e-checks.
As per CBI rules, an e-check is a new form of check subject to the same regulations for printed checks. E-checks are validated by digital signature.
An electronic check, or e-check, is a form of payment via the internet or another data network crafted to perform like any conventional paper check. Because the check is in an electronic format it is processed faster reducing bureaucratic hassles.
Using the platform one can issue digital checks with an electronic signature. It also enhances supervision of the CBI and commercial lenders over check transactions.
Generally, the cost of issuing electronic checks is less than paper checks. Electronic checks also have the added benefit of safeguarding against fraud and theft.
In January the Informatics Services Corporation, affiliated to the CBI, unveiled its digital check payment platform, called Checkad, as a vastly improved replacement for paper checks.
Checkad offers 30 types of services. Users can apply for getting digital checkbooks, issue e-checks, use such checks as guarantee, block payment and track the clearance process.
Measures against bad checks became law in 2018 as part of amendments to the Check Issuance Law.
The regulator says it is trying to come up with effective measures to maintain and improve the credibility of checks.
It has introduced digital checks after designing an integrated electronic check system and streamlined current electronic check-processing platforms, namely Sayyad and Chekavak.
Sayyad is a system designed to run a credibility check on account holders wanting to write a check. Chekavak is an electronic check processing system eliminating the physical circulation of checks and enhance check credibility.
