Economy, Business And Markets

Russian Firm Signs Contract to Develop Int'l Payment Infrastructure for Iran

Russia’s Banking Production Center has signed a deal with Informatics Services Corporation affiliated with the Central Bank of Iran to establish high-standard infrastructure to help Iran connect with international payment systems
The deal was signed by the representatives of ISC and BPC in Tehran on Oct. 11.
The deal was signed by the representatives of ISC and BPC in Tehran on Oct. 11.

The Informatics Services Corporation, a leading developer of banking and payment solutions affiliated with the Central Bank of Iran, has signed a deal with Russia's BPC to develop a national platform to link international card payment systems with Iran's.

"ISC has signed the deal in line with adhering to its responsibility of providing connection to international payment systems, which is one of the strategic projects devised by CBI," reads a statement published by ISC.

Elaborating on the process that led to the deal, ISC's chief executive, Seyyed Abu Talib Najafi, said after his company was given the mandate to set up the prerequisites for connecting Iran to international payment systems, the firm started preliminary efforts to look for bidders through local and foreign media platforms.

"Nine foreign companies received the documents for the tender and after completing the formalities, five companies presented their proposals," he added.

Three companies, namely France's Worldline, Russia's OpenWay and BPC, were shortlisted and rated, and BPC became the winner of the tender based on its ratings and proposed prices.

Founded in 1995 as Banking Production Center, it is a recognized provider of e-payment solutions in the international financial industry.

ISC's Department of Public Relations disclosed to Financial Tribune that the deal is worth $11 million.

The central bank gave ISC the green light to start the International Card Payment Total Solution project last October with the aim of connecting “Iran’s payment ecosystem to the international card schemes, including Japan’s JCB and China’s UnionPay, in the short run and finally linking it to Visa and MasterCard over the long term".

According to a document published on ISC's website at the time, the mandate called for helping "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 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.

Now, BPC is tasked with creating the infrastructure for Iran to be able to meet international standards required for the likes of JCB and UnionPay–the two likely candidates to provide international bank cards to Iranian customers in the future–to enter its market.

According to the ISC chief, negotiations with BPC for drafting the documents of the deal were finalized on Monday while the deal itself was signed on Wednesday.

"In addition to having multiple experiences in implementing similar projects in various countries, BPC has so far signed deals to build the infrastructure for some Iranian lenders [to get connected to the foreign payment system]," he said without disclosing the name of any bank.

According to ISC's Public Relations Department, the two lenders cooperating with the Russian firm were state-run Bank Melli Iran and the privately-run Saman Bank.

ISC floated the tender outlining clearly what it wants from the applying companies.

According to the document published last year, ISC expects a solution that includes a Central Card Management Infrastructure to operate in tandem with the current Iranian card processing retail payments infrastructure, while “the current Iranian card processing retail payments infrastructure will later be merged or transferred to the proposed parallel retail payments infrastructure”.

The proposed parallel card management infrastructure is planned to build a new domain called the Iran Network for Electronic Transactions, which 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, as well as fraud and risk management and anti-money laundering capabilities.

According to ISC, which is also pursuing a mobile gateway and high-volume EMV card production and device management, online and offline transaction management, as well as dispute resolution, are other components of the project.

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