The Central Bank of Iran says plans for promoting contactless payment are making progress.
"More than 20,000 contactless payment terminals are installed across the country. With the help of a payment service company almost 764,000 POS terminals used in stores were equipped with the NFC reader," Mehran Mahramian, CBI's deputy for innovative technologies, was quoted as saying by ISNA.
"We expect cardless payment to become widespread when more banks and payment companies start offering the service," Mahramian added.
Back in February, the CBI launched a contactless payment mechanism based on EMV standard.
EMV, which stands for Europay, Mastercard and Visa, is a global standard for cards equipped with computer chips and its technology is designed to enable secure payment at compatible point of sale (POS) terminals.
As per the mechanism, users only need to add their bank card information to applications on their smartphone that enable users to make transactions without any physical contact with POS terminals.
Mahramian noted that the new payment mechanism can easily be used by smartphones equipped with NFC, which he said "is available in more than 80% of smartphones used in Iran".
Generally, there are two types of contactless payments, namely contactless cards and electronic wallets. When a user uses a contactless card for making a transaction, the card establishes communication with a point of sale (POS) terminal via NFC (near-field communication) or RFID (radio frequency identification).
A digital wallet (e-wallet) is a software-based system that securely stores users' payment information and passwords for numerous payment methods and websites.
Using the new payment instrument is optional as it is designed merely to facilitate retail payment "and does not aim to upend the status quo".
The CBI has been calling on banks and PSPs to compete for offering the newly-developed mechanisms.
Three main services are offered via the e-payment network (Shaparak) in Iran, namely internet, cellphone and point-of-sale (POS) terminals. POS devices top the list with 75.7% (12.78 million) market share, followed by online payment gateways with 12.84% and mobile instruments 11.43%.
Iranians made transactions with more than 124 million bankcards (including debit cards, gift cards and credit cards) during the month to July 21.
More than 3.16 billion transactions worth 5,368.84 trillion rials ($19.8 billion) were processed by the national payment network during the month to August 22.
