CBI to Ease Contactless Payment

EghtesadOnline: The Central Bank of Iran will soon unveil its contactless payment scheme, allowing cardholders to make payment transactions solely using their smartphones, the bank's governor says.

News ID: ۷۸۵۹۳۶

07 February 2021

"The scheme is developed in accordance with international security standards … It is aimed at easing payment transactions and at the same time helping cardholders adhere to health protocols in the midst of the Covid-19 pandemic," Abdolnasser Hammati also wrote in a post on his social media account.

According to Hemmati, users only need to add their bank card information to mobile applications on their smartphones and the application would enable users to make transactions without any physical contact with POS terminals.

Hemmati did not elaborate further.

Generally, there are two types of contactless payments in use, 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.

The CBI seem to be more interested in promoting payment methods using electronic wallets at present, such as QR code payment that is a contactless payment performed by scanning a QR code from a mobile app.

In the QR code payment process, the user opens the payment app once the total transaction amount is set in the POS system of the retailer. The QR code payment app displays a QR code that identifies with the user’s card details. The retailer then scans the QR code with a scanner to conclude the transaction.

In August 2020, the Money and Credit Council, the top supervisory and regulatory body of Iran's banking network, allowed banks and non-bank credit institutions to offer electronic wallets to help facilitate micro transactions.

The number of cashless transactions has been growing steadily. CBI data show the growth of electronic payment tools and their value, which is largely due to the Covid-19 lockdowns, as more people order goods and services online.

The nationwide payment settlement network in Iran, Shaparak, processed 2.691 billion payments worth 4,190.8 trillion rials ($17.4 billion based on the open market forex rate) in the month ending Dec. 20. Transactions were up 19.13% in volume and 50.16% in value compared with the same period of last year.

POS terminals are the most popular payment tool in Iran, as stores across the country employ 9.48 million such tools.