Most Iranian Fintechs in Credit Payment Sector

Three quarters of all Iranian financial technology firms are currently active in the payment sector, according to an electronic banking expert.

"But the big issue in the payment sector is that innovation in offering services is difficult, because credit payment systems do not exist and Iran has a peculiar fee system," Nima Namdari added.

"Incomes in the payment sector are very limited," he was also quoted as saying by the official news portal of the Monetary and Banking Research Institute.

The institute is in charge of holding the upcoming annual Conference on Electronic Banking and Payment Systems scheduled for Jan. 2 in Tehran.

However, Namdari, who is also the deputy for projects and development at the Ertebat Farda E-Commerce Company, predicts a bright future for the payment sector and fintechs because of their young age and strong structures.

"No serious step has been taken for fintechs and the reason is that banks are mostly aging and that has made them conservative," he adds.

However, the expert is of the belief that lenders will catch up soon, as they will be forced to make a move to increase client satisfaction and diversify their services because of their dire profitability and financial conditions.

Stressing that if the banks wish to expand their array of services, Namdari said they have "no choice" but to depend on outside players i.e. fintechs, but they will require infrastructures and platforms to do that.

"Platforms have currently been formed and that represents a good step in this field. But in my opinion, the banks are currently are lagging in this regard when compared to the payment sector," he said.

As to how long it will take specialized banking fintechs to emerge in Iran, the expert said their number will rise up to 10 in the next two to three years while the number of non-payment fintechs would be in double digits.

Namdari defines non-payment fintechs as firms operating in personal financial management, credit evaluation and wallets, i.e. any fintechs whose main activity does not deal with bank cards.