CBI Cancels USSD Payment Fees

EghtesadOnline: The Central Bank of Iran has sent a directive to the banking system announcing that fees levied on payments made through mobile phones have been eliminated, in what can be interpreted as a blow to mobile operators.

News ID: ۷۸۳۲۴۴

14 July 2018

The news had been circulating in local media outlets for the past few days, but had remained unconfirmed. CBI has yet to officially release a statement or the text of the directive itself, but reactions from beneficiaries confirm the news.

Way2Pay, a specialized news website, has corroborated the story quoting an unnamed CBI source.

According to the website, the directive was officially notified to all banks and credit institutions last week and came into effect as of July 11, Financial Tribune reported.

The news is significant in that it cuts a major multimillion-dollar revenue stream for mobile operators MTN Irancell and MCI that currently control almost the entirety of mobile financial services. This is because the payment fee format included a chain where banks would pay fees to payment service providers that would in turn pay the operators.

After the news was publicized, Asan Pardakht, Iran's biggest online mobile payment application that claims about 30 million users, reacted by publishing a statement for its stakeholders.

The company said it was ready for this, since the idea was floated on multiple occasions in the past. It also said, "The income effect of this issue has been considered to be zero in the budget forecast of the company for the current fiscal year [ending March 2019] and will naturally have no negative effect on the company's profit projections".

Seyyed Ebrahim Hosseini-Nejad, Bank Saman's head of SEP—the company in charge of payment services and the main rival of Asan Pardakht, also confirmed the news. He noted that his company was prepared for this, as the idea was in the making for a long time and stressed that he will increasingly focus on online mobile payments rather than the Unstructured Supplementary Service Data.

CBI has been trying to eliminate USSD altogether, as it is deemed unsecure. However, since it faced high-profile resistance from the Ministry of Information and Communications Technology that supports mobile operators, CBI has seemingly adopted a different approach by cutting off USSD payment fees altogether.