Economy, Business And Markets

Shaparak Transactions Drop After Online Payment Services Ban

Shaparak Transactions Drop After Online Payment Services BanShaparak Transactions Drop After Online Payment Services Ban

Shaparak, the domestic payment and settlement network, handled 831 million transactions during the first month the fiscal year that ended in March with a total value of 786.3 trillion rials ($25.8 billion). The numbers indicate 19.6% drop in total number of transactions and 33.6% cut in the total value of transactions compared with the previous month.

The data, published on Shaparak’s website, however, indicates a year-on-year growth of 25.12% in the total number of transactions and 27.21% surge in value. The annual surge is natural given the growth in the electronic payment industry over the past year.    

 The decline is likely the result of the Ministry of Industries, Mining and Trade’s decision to block mediatory payment services by late March. Almost all payment websites where blocked during the final days of the previous fiscal year. The move is estimated to have killed over 1,000 jobs which relied on non-bank payment services for running their businesses.

‘Aggregators’, as they are known, are reliable as they mostly act as mediators in online payments.

Reza Olfat Nasab, secretary of E-Businesses Association, said that non-bank payment gates had applied for operation license and they were expecting the permission when they were suddenly banned.

“Officials in the e-trade promotion organization said that payment websites could be used for money laundering because the CBI is not supervising the transactions,” he added.

 “Blocking payment websites during the final days of the year was a risky move, because they were holding huge amounts of users’ money,” he told the Financial Tribune’s sister daily, Donya-e-Eghtesad.

Azim Ghader, Jahanpay’s owner, one such payment website that was banned, said, “We had 45,000 active users, and they had a sum of 10 billion rials in their accounts when we were blocked. We struggled to keep their accounts accessible, so that they could access their money.”

 Bank’s Performance

According to Shaparak, Bank Melli Iran accounts for 21,195 of all active bank debit cards in the market, more than what 34 other banks hold combined. Bank Mellat and Bank Saderat Iran, come next and account for 12.6% and 12.4% of active bank cards, respectively.

Iranian banks currently issue credit cards, debit cards and gift cards. During the said period, Bank Melli Iran accounted for 23.07% of the total debit cards. Bank Pasargad Iran issued 37.16% of the credit cards in the first month of the fiscal year. Tejarat Bank, however, dominates the gift cards’ market as it accounted for 35.8% of all gift cards issued.

During the said period, Shaparak recorded 107.5 million failed transactions, which accounts for 11.5% of the total transactions. Banks, as card issuers, were responsible for 10.97% of botched transactions, showing improvement in their operation, compared to the previous month’s 21.34%.