Economy, Business And Markets

The Curious Case of Prepaid Credit Cards in Iran

Visa and MasterCard are unofficially issued in Iran and sold multiple times their real value.
Visa and MasterCard are unofficially issued in Iran and sold multiple times their real value.

International credit cards, namely Visa and MasterCard, were slated to enter Iran, but they didn’t. 

The imposition of nuclear sanctions against Iran had made the official sales of these cards illegal. The year 2013 was the last year a couple of banks issued international prepaid credit cards in Iran officially. 

Nevertheless, some companies continue to issue Visa and MasterCard and sell them multiple times their real value. 

“These companies take ridiculously high commissions on their sales. For example, a 100-dollar card is sold at $118,” Iman Eslamian, a banking expert, said. 

The term “sanctions exploiter” would apply to these companies, according to a report by the Persian daily Shahrvand. 

Visa and MasterCard have networks that process payments between banks and merchants for purchases made with the cards. 

“But these cards are neither legally nor directly available in Iran. They cannot be reloaded either. For a short period, Iran tried to connect to these networks indirectly through an intermediary Georgian bank. Getting wind of the news, the US browbeat the Georgian bank and other banks that intended to strike such deals with Iran,” he said.

“As we speak, a reputable Japanese bank has facilitated banking relations between Iran and other countries,” Eslamian says. 

Some of the prepaid credit cards issued by unofficial companies in Iran are counterfeit, the report adds. 

“I cannot carry out online transactions using the card I bought,” says an interviewee while another said he bought a $100 card, only to see it was worth $97. 

In August, Minister of Communications and Information Technology Mahmoud Vaezi announced that with the removal of financial and banking sanctions, MasterCard services would be made accessible by Iran Post Company. 

The news quickly made headlines around the world, but MasterCard denied any activity or cooperation with Iran. 

“MasterCard does not have any activities in Iran, as sanctions remain in place for US-based companies for some time,” said the company’s spokesman, Seth Eisen.

Later, Vaezi clarified the misunderstanding related to the activity, or lack thereof, of US-based multinational financial services corporation MasterCard in Iran. 

“What we announced was that the removal of sanctions has started a new phase of international cooperation in various communications fields, and due to this opportunity, Iran Post Company has signed a deal with an intermediary firm that offers international prepaid credit cards to Iranians,” he said.

“At that time, we did not mention MasterCard at all, but some media assumed that the services will be provided by MasterCard.”

Vaezi explained that the company, which offers international credit card services, is active in Iran under the name “Vision Card”, adding that MasterCard’s announcement that it had no activities in Iran was correct. 

This comes as Iran Post Company has not signed any agreement with international credit card companies and only acts as an intermediary for some companies. 

According to the company’s PR office, issuance of such cards depends on the Central Bank of Iran’s credit license.

“Had the CBI acted more swiftly on the international stage, legal problems associated with prepaid credit cards would have been fixed by now,” Eslamian said.  

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