Iran, Russia bank payment system integration delays due to legal issues

Iran, Russia bank payment system integration delays due to legal issues

Baku, Azerbaijan, Dec. 25‎

By Fatih Karimov – Trend:

The integration of Iranian and Russian bank payment systems is delayed due to some legal issues, said Davood Mohammad-Beigi, the director of Payment System Department of the Islamic Republic’s Central Bank.

The two sides are negotiating the legal issues, Mohammad-Beigi said, the official portal of the Monetary and Banking Research Institute of Iran reported.

Good steps have been taken in technical issues, the Iranian official said, adding that in recent months the tests have been slowed down due to legal issues.

The issue of linking Russia’s Mir payment system to Shetab - Iran's local payment system was discussed during the visit of CBI Chief Valiollah Seif to Moscow in March 2017.

Earlier in May CBI said that test transactions are underway for integrating the payment systems and Iranian citizens will be able to use their bank cards in Russia from August 2017, while Russian bank cards will also operate in Iran like local cards.

At first step holders of bank cards will be able to use ATMs of both countries, but later usage of all payment systems of Iran and Russia will be available for the card holders, the Iranian Central bank said at the time.

But Now, Mohammad-Beigi says that Russia’s Mir payment system ‎was planed to be operational in Iran in December 2017, but the Russian side has announced that legal issues should be settled first.

He further said that before switching the payment systems a contract should be signed between the central banks of the two countries.

The issue of security and business standards is a main problem, he said, adding that despite significant developments in the field of electronic banking in Iran, a large number of Iranian banks are not ready for this due to lack of communication with the international community.

Mohammad-Beigi explained that the cooperation with Russia will cover magnetic stripe cards, not smart payment cards.

Iran’s central bank plans to link the Iranian credit cards to the banking network of the neighboring countries. So far positive talks have been held with Azerbaijan, Pakistan and Iraq in this regard, according to the Iranian officials.

Last year Iran and Azerbaijan signed a memorandum of Understanding for cooperation in the banking sector. Under the terms of the MoU, the citizens from the two countries will be able to use their banking cards in Iran and Azerbaijan.

Iran has lost hope to connect to international credit card services, including MasterCard and Visa, despite the initial optimistic statements following the removal of international sanctions last year.

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