Currency Volatility to Curtail Payment Network Growth
EghtesadOnline: Ongoing currency fluctuations in Iran have the potential to put a dent in the strong growth of the country’s payment network, the head of Informatics Services Corporation, the company in charge of operating Iran’s payment systems, said.
“We saw a 20% growth in the number of transactions in payment systems during the first three months [of the current Iranian year that ended on June 21] compared with the similar period of last year, but because of currency issues and the pressure on people, we may not witness these growth rates in the number of transactions by the end of the [fiscal] year [March 20, 2019],” Aboutaleb Najafi also told IBENA.
ISC is affiliated with the Central Bank of Iran and oversees several payment networks, including the interbank Shetab, the payment settlement network, and its subset Shaparak, the system for processing checks Chakavak, the interbank system for large transactions Paya and another interbank system Satna.
Established in 1993, ISC is an executive arm for creating and operating Iran’s comprehensive banking automation system that includes all the aforementioned systems, according to Financial Tribune.
As the company’s chief executive said, each of the systems registered significant annual growth rates.
The company’s previously announced figures show that during the previous fiscal year to March 2018, Shetab transactions (27 billion) grew by 30%, Shaparak transactions (18 billion) increased by 35%, Chakavak transactions (122 million checks) rose by 26%, Paya transactions (2.44 billion) grew by 12% and Satna transactions (11 million) showed an 18% year-on-year rise.
The official pointed out that these growth rates were registered during a year that closed with an annual inflation rate of less than 10%. Many experts and pundits predict that Iran’s inflation rate will once again be in the double digits by the end of the current fiscal year.
“The atmosphere created by the rise in foreign exchange rates in the country will surely affect people’s purchasing power,” he said.
Najafi implied that the strong annual growth in Iran’s payment systems may not only be clipped, but come to a halt altogether.
“The number of transactions at the end of the year may remain the same as at the end of the previous year,” he said.
However, the official reassured that the systems are able to conduct any number of transactions safely and securely as they did during the final days of the previous fiscal year when they registered a large number of transactions.
Najafi had previously announced that 162 million transactions were recorded only on the eve of the Iranian New Year (started March 21) in the Shetab system, which was a record, while a daily average of 75 million transactions was processed in the system last year.