The Central Bank of Iran has finalized the draft of a regulatory framework for e-wallets that is expected to be unveiled soon, said Ayandeh Bank's deputy for electronic banking affairs.
"The outbreak of Covid-19 encouraged people to use electronic wallets for making payments…This is an opportunity for promoting e-wallets and was embraced by the CBI," Abdolreza Sharifi was quoted as saying by IBENA.
The rulebook includes a wide-range of regulations regarding the development of e-wallets, "The regulator will not authorize all banks in one go and will assess applications on a case by case basis."
Sharif, however, concurred that such a process may not be appropriate because it can create unfair advantage for some banks. "I think all banks and institutions should be authorized to offer e-wallet services."
As per the new regulations, all non-bank companies now offering e-wallet services will have to work under the umbrella of one authorized bank.
Back in 2017 and as part of a CBI plan to authorize fintechs, it was announced that fintechs planning to offer electronic wallet services must involve a financial institution in their work. However, the regulator said this does not mean that banks are allowed to interfere in the business of fintechs, as they will only act as an entity tasked with storing and safeguarding the money entrusted to the wallets.
The CBI's approach to e-wallets relies mostly on fees. "The business of electronic wallets should focus only on obtaining fees."
Payment service providers could also see their revenues decline from transaction fees, once more people start using e-wallets.
"This could put an end to PSP monopoly over the payment network," Sharifi said, "Under the new circumstances PSPs will be compelled to innovate” or move out of the way.
Banks currently cover the fees for most types of payment services. The majority of transactions in Iran are made via POS terminals.
Since December 2015, banks are obliged by the CBI to pay the transaction fees.
