Iran, Russia Integrate Bank Card Systems

EghtesadOnline: Iran and Russia have integrated their bank card systems, allowing their citizens to use the cards in each other's country from late August, the Central Bank of Iran announced.

News ID: ۷۷۶۳۳۱

20 May 2017

"Iranian citizens who have a Shetab [Iran's national payment system] card and those who have Russian [Mir] cards will be able to use ATMs in both countries by the end of [the fifth Iranian month of] Mordad [August 22]. As part of the next phase, they will be also able to jointly use other payment gateways," the statement published on CBI's official news website reads.

In early May, Nasser Hakimi , the head of CBI's Information Technology Department, had announced that Iran is in various stages of integrating its bank card system with five countries, namely Iran, Russia, Japan, Azerbaijan and China.

According to CBI, in light of negotiations during the past few months, an agreement was signed on May 15 to integrate the Iranian payment system with that of Russia based on which "test transactions between the two countries have begun".

According to Financial Tribune, Russia has a nationwide payment network as does Iran, and given the geopolitical implications and importance of bilateral ties, the development of mutual banking ties is a crucial requirement.

The Interbank Information Transfer Network, known as Shetab, is the Iranian national interbank network established in 2002 for creating a uniform backbone for the Iranian banking system. All banks have since been connected to it.

The Russian national payment system called Mir, which translates as "World" or "Peace", was created on July 23, 2014 with the goal of reducing risk from further financial sanctions by the West and cut reliance on western systems, such as Visa and MasterCard.

The latter two operators stopped providing services to Russian clients after Washington imposed sanctions over Moscow's role in the Ukraine crisis.

Russia has been largely integrated into the global economy since the 1991 collapse of the Soviet Union. But the Ukraine crisis, the biggest confrontation since the Cold War, led officials to look for ways to reduce reliance on the West.

Common Interests

The Russian national payment system's main objectives are setting up a reliable money transfer service by using national payment instruments, building trust in cashless means of payment, creating Russian sovereign payment areas independent of foreign companies and promoting Mir Russian national payments cards in the international market.

Mir cards were first issued in December 2015 in the framework of a pilot project.

As CBI points out in its statement, integration of Iran-Russia bank cards will help develop tourism facilities throughout Iran for Russian tourists and other countries with "common interests" while easing transfers for Iranian tourists travelling to Russia.

Integrating Iranian bank cards with those of foreign nations was on CBI's agenda as soon as the nuclear accord, dubbed the Joint Comprehensive Plan of Action, was implemented on January 16, 2016.

Expanding this integration will "be a prelude for the standardization and internationalization of the Shetab network across the world".