ISC Outlines Program for Links to Int’l Card Schemes

Informatics Services Corporation, a leading developer of banking and payment solutions in Iran, has launched a formal bid to seek partnership with top payment solution suppliers to develop a national platform for management of international card payments.

The company has been given an official mandate to start the “International Card Payment Total Solution” project, with the aim of connecting “Iran’s payment ecosystem to the international card schemes (ICS) including Japan’s JCB and China’s UnionPay in the short term and finally linking it to Visa and MasterCard over the long term,” according to a request for Information document published on ISC’s website.

“This mandate is defined to help create the facility of accepting foreign visitors’ international payment cards in Iran’s payment network and issuing international payment cards for Iranians traveling abroad.”

The Central Bank of Iran has announced that it is in talks with foreign payment networks as well, including European companies to install and implement an international card payment switch in Iran. The absence of international payment systems in Iran has created difficulties for foreign visitors who sometimes have to carry large amounts of cash to pay bills and make purchases in Iran.

Following the lifting of sanctions in January, the CBI started talks with JCB and China’s UnionPay. The two are said to be more likely to provide international bank cards to Iranian customers.

 ISC has noted however that the outlined information about the expected solution is meant to only present a general image of the project and it aims to help the company recognize potential suppliers. “It will constitute neither an exact description of the project, nor an official explanation of its requirements.”

 New Domain

The body expects a solution which includes a Central Card Management Infrastructure to operate in tandem with the current Iranian card processing retail payments infrastructure, while the “the current Iranian card processing retail payments infrastructure will later be merged or migrated into the proposed parallel retail payments infrastructure.”

“The main components of the proposed parallel card management infrastructure are planned to build a new domain called Iran Network for Electronic Transactions (‘INET’)-which will fulfill the purpose of this request.”

INET is expected to be a secure, standard platform, capable of offering a wide range of features including, switching capabilities, international card schemes’ interfaces, loyalty management, data analytics and Business Intelligence, and Fraud & Risk Management as well as AML.

Merchant and device management, online and offline transaction management, dispute resolution are other components of the project, according to the SCI.

“The INET platform should support a mobile gateway as a component of the Central Switch,” the document reads. “The infrastructure components should also include high volume EMV card production.”

Established in 1993, the ISC is dedicated to development of national banking and payment systems, core retail banking total solutions, data center & operation, Wide Area Networking (WAN )solutions and high-end banking equipment. The ISC is a subsidiary of the National Informatics Corporation affiliated with the Central Bank of Iran.

The current payment ecosystem of Iran, mostly developed by the Informatics Services Corporation, already includes Real-Time Gross Settlement System (RTGS), Automated Clearing House (ACH), Scripless Securities Settlement System (SSSS) and Inter-Bank Card Switch systems which include SHETAB (Banking Network) and SHAPARAK (Payment Network).

Numbers show that every Iranian holds 5.5 bank cards on average, as the total number of active bank cards–which are mostly debit cards– stands at a staggering 334 million.

Shaparak, the domestic payment network, hosts an average of 50 million transactions every day, mainly through about 4.5 million POS terminals installed in shops across the country, about 44,000 ATMs and considerable number of online payment gateways.

Payment and banking solutions are considered as having high potential for expansion in the post-sanctions era. Developed and maintained by domestic institutions during the sanctions, the two main sectors have managed to attract a considerable number of users.