CBI: Iran, Russia negotiating integration of bank card systems
Tehran and Moscow are conducting tests to link their bank card systems and are in negotiations over a formal accord between the central banks in order to overcome legal issues, Director of the Payment System Department of the Central Bank of Iran (CBI) Davood Mohammad Beigi said Monday.
“At present, Iran has the closest ties with Russia in the field of international credit cards and good measures have been taken in technical terms … in recent months, tests have been carried out less regularly due to some legal problems. In order for any relations to be established, the two countries and their respective central banks need to reach agreements,” Beigi said, as quoted by the Mehr News Agency.
The countries are expected to cooperate on magnetic cards, the official added, Sputnik wrote.
“They will be normal debit cards which can be used by the customer abroad. With respect to the rate agreed upon between the customer and the bank, the bank pays the amount in a foreign currency and will withdraw the equal amount in rial from the person’s bank account,” Beigi explained, while answering the question on whether the cooperation involves the currency cards or the standard ones.
The Central Bank of Iran announced in May that the country is in various stages of integrating its bank card system with five countries for the citizens of both sides to be able to use their bank cards in each other’s countries.
The head of Information Technology Department at the Central Bank of Iran Nasser Hakimi told IRNA at the time that “Establishing bank card integration with countries that have a national payment network is a priority, which will create greater ease [of doing business]”.
Japan is the other important target country with which negotiations were in the final stages, Financial Tribune wrote in May.
On linking the bank card systems of Iran with Azerbaijan and Iraq in order to offer banking services to tourists of both sides, Hakimi admitted that progress was coming off slowly as the two neighboring countries were bereft of a nationwide payment network. China is reportedly on the list of target countries for bank card integration as well. Tehran was unable to integrate its banking sector internationally due to the Western sanctions, imposed over its nuclear program. Once the restrictive measures were lifted due to the historic JCPOA reached in 2015, Iran started to gradually link its banking sector with foreign countries.
In September, Tehran allowed Iranian financial institutions to issue credit cards for the first time in its history.
The inability of Iranian banking system to join the international card systems as a result of sanctions had created big hurdles for both foreigners spending money in Iran and Iranians shopping abroad, as the latter had to deal with the hassle of carrying large amounts of cash with them.