Transactions processed by Iran’s electronic payment network (Shaparak) shot up in the last calendar month to May 20 as businesses gradually opened after lockdowns over the coronavirus pandemic eased.
Shaparak processed 2.60 billion transactions worth 3,977.41 trillion rials ($23.26 billion) during the month. That was 35.6% higher in volume and up 101.02% in value compared to the month before that coincided with the annual Nowrouz (Persian New Year) holidays.
While the steep increase in electronic payments is normal in the month after the two-week holiday, Shaparak data show that the monthly increase in transactions doubled the growth reported for the similar month last year (April-May 2019) when monthly value and volume of transactions registered 50% and 17% hike, respectively.
The dramatic rise in transactions could also be interpreted as a good omen that the recession is fading and businesses are returning to normalcy.
Drawing parallels between the payment network’s performance in the first two months of this year and the same period last year, Hossein Salahvarzi, vice president of the Iran Chamber of Commerce, Industries, Mines and Agriculture construed the surge as a sign of economic growth.
“There are positive signs that the economy is slowly moving away from the recession [that emanated] from Covid-19,” he wrote in his Tweeter account.
Spread of the deadly disease worsened conditions across the spectrum of businesses over the past three months, destroying livelihoods and disrupting manufacturing units. The pandemic hurled economies big and small into the worst recession in recent memory.
Conditions in Iran took a turn for the worse after the government on March 27 ordered a total lockdown on retail trade, namely the key services sector. Many restrictions were in force up until recently.
While the government relaxed most of the restrictions after hospital data appeared to show that the virus was almost under control, there are concerns over a second wave of the virus.
Iran’s infections increased on Saturday with 2,269 new cases overnight. Close to 170,000 coronavirus cases have been reported with the death toll rising to 8,209, making it the hardest hit by the virus in the Middle East.
Highs and Lows
Shaparak offers services via internet, cellphone and point of sale (POS) devices.
The number of instruments for processing payments showed 2.21% increase compared to the earlier month, reaching 11.09 million.
With the biggest contribution to growth, the number of internet payment gateways and POS devices in shops increased 4.84% and 2.02%, respectively.
The lowest hike was recorded for mobile instruments with 1.11% monthly.
As is usually the case, POS devices topped the list of instruments with the biggest market share accounting for 77.09% of market share.
This was followed by mobile instruments with 12.06% and online payment gateways having 10.85% of the market share.
Processing more than 2.6 billion transactions worth 3,127.9 trillion rials ($18.3 billion), POS devices accounted for 89.9% of the total transactions.
Coming second, online gateways accounted for 5.99% of the total with more than 156.15 million transactions followed by mobile instruments at 4.03%.
The report indicates that as for the purpose of transactions, purchasing goods and paying for services had the largest share with 86.06% transactions.
Transactions processed for buying cell phone recharges and checking account balance respectively accounted for 8.59% and 5.35% of the total Shaparak transactions.
Based on the report, there were 1,827 instruments per 10,000 adults (above 18 years old).
As always, POS terminals held the lion's share with 1,408 instruments per 10,000 adults.
Online gateways had the lowest penetration rate with 198 instruments per 10,000 adults. Tehran Province topped the list of provinces with the highest number of POS terminals.
There were 1.78 million active POS devices in the sprawling metropolis, which indicates 1.65% rise compared to the earlier month.
Khorasan Province was next with 652,781 and Isfahan with 593,995 devices. Ilam Province had the lowest number of POS devices with 61,827 devices.
