Creating the necessary grounds for the use of international credit cards in Iran would require at least six months, says an official with the National Informatics Corporation, affiliated to the Central Bank of Iran.
“To bring international credit cards to Iran, we need to prepare technical infrastructure and the CBI has several related projects as part of the ‘2021 Roadmap’, the agent of which will be the NIC,” Seyyed Farshid Ya’soubi said in a talk with IBENA.
Iran has outlined a program for economic growth envisaged in the sixth five-year economic development plan, which ends in 2021.
“The most important component in this section is to create switching capabilities using standardized formats,” added the deputy for investments and corporations at the NIC. “The matter is under review and is being communicated to the relevant monetary and supervisory bodies. It is estimated that the preparations should be finalized in six months.”
On the collaboration between the Ministry of Communications and Information Technology and the Post Bank of Iran to issue Master Cards for Iranians, he said PBI had claimed that it has succeeded in bringing the cards to Iran, “but it was mainly a matter of issuing them as prepaid gift cards that can be reloaded.”
The cards are issued outside the country and delivered to domestic users, he explained, saying it is possible for the applicant’s name to be engraved on the card. “To reload the balance of the cards, a request has to be made at PBI offices and the rest of the process will be done by the bank.”
The official pointed to NFC (Near Field Communication) technology, noting that what often goes unnoticed on this subject is that mobile payment and mobile banking are usually mistakenly used interchangeably. “In mobile banking, the bank is the main focus while in mobile payment, a bank, an operator or another entity can be the focus.”
A week ago, Mobile Telecommunications Company of Iran (locally known as Hamrahe Aval) and Informatics Services Corporation announced a partnership to offer innovative banking and payment solutions on mobile phones. According to the deal, Hamrahe Aval, along with the CBI and the Ministry of Communication and Information Technology, will develop the needed infrastructure for mobile financial services across the country.
NFC and mobile wallet are among the planned services. NFC is a short-range wireless connectivity standard that uses magnetic field induction to enable communication between devices when they’re touched together, or brought within a few centimeters of each other.
Ya’soubi said in today’s banking, risk management is something that demands close attention and risk management is at a low level in small transactions. Therefore, he added, the level of risk management in small transactions using mobile banking differs greatly with other payment transactions that take place on a large scale.
“In mobile payments, speed is always lower when security is strengthened and vice versa, therefore SIM cards that use NFC technology will only establish a link,” he said. “Other matters such as from where the money is drawn, where it is deposited and the level of its security must be reviewed.”
The electronic banking expert stressed that rules and regulations pertaining to payment must also be managed. “Furthermore, there is the matter of the digital signature which has its own certain complications and requires an effective collaboration between the CBI and agent banks to be fully implemented.”
He noted Iran’s electronic banking is mostly lacking in the hardware sector. Although efforts have been undertaken, “it is not enough on its own and that is why we need foreign technology to establish a link with other countries and create an integrated and comprehensive system.”
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