Iraq’s Electronic Payment Acceptance Landscape

Iraq is experiencing a transformative shift towards electronic payment acceptance, driven by recent initiatives from the Central Bank of Iraq (CBI) and the Iraqi Council of Ministries. With a focus on promoting digital financial services, the country is poised to witness significant growth in the adoption of point-of-sale (POS) and eWallet solutions. This article explores the current landscape, key partnerships, and the future outlook for electronic payment acceptance in Iraq.

In January 2023, the Central Bank of Iraq took a significant step by popularising electronic payment acceptance, urging payment service providers (PSPs) and acquirers to commence their efforts towards implementation. Following this, the Iraqi Council of Ministries supported the initiative by instructing governmental and private entities to facilitate electronic payment acceptance. Furthermore, the government issued a decision to waive taxes and customs on imported ATM and payment POS machines. The implementation of these decisions is set to take place on 1st June 2023.

Currently, there are 17 licensed payment service companies in Iraq authorised by the Central Bank for payment acceptance and acquiring. These PSPs have contributed to the deployment of over 13,000 POS machines across the country. Alongside POS acquiring, mobile money companies such as NassWallet, ZainCash, AsiaPay, and FastPay play a crucial role in the payment acceptance ecosystem. NassWallet, in particular, stands out with a wide range of merchants, including online stores and apps, accepting NassWallet as a payment method.

Partnerships Driving Adoption

Since the populariSation decision by the CBI and the Council of Ministries, several partnerships have emerged to support the growth of electronic payment acceptance in Iraq. For example, Rafidain Bank and Switch, a leading electronic payment services company, have partnered to distribute POS devices throughout the country. This collaboration aims to expand the acceptance infrastructure and enable merchants, regardless of their size or location to accept digital payments.

Another significant partnership in the market is between Amwal and Ashur Bank. As a result of this alliance, merchants can hold or create merchant bank accounts with Ashur Bank and gain access to POS machines. Furthermore, this partnership offers merchants the possibility of obtaining credit cards, enabling them to expand their business operations and provide greater convenience to their customers.

Additionally, Areeba, a prominent electronic payment solutions provider, has recently announced partnerships with Al-Taif Islamic Bank and Iraqi Noor Islamic Bank. Through these collaborations, Areeba aims to provide comprehensive electronic payment solutions, particularly for POS payments and online payment gateways, to the customers of these banks. This initiative seeks to enhance the digital payment experience for bank customers and encourage the adoption of electronic transactions.

A notable use case following the efforts and partnerships made is the adoption of electronic payment acceptance in Iraq using POS machines at Baghdad gas stations. Traditionally, fuel purchases were primarily cash-based transactions. However, with the introduction of POS devices, customers now have the convenience of using their debit or credit cards to make payments. This transition has streamlined transactions, reduced cash handling, and enhanced overall efficiency for both customers and gas station operators.

Driving Financial Inclusion

The future of electronic payment acceptance in Iraq looks promising. With the Central Bank’s popularisation decision, government support, and the partnerships already formed, the foundation has been laid for substantial growth. As the acceptance infrastructure expands and consumer awareness increases, more merchants, including gas stations, retail stores, and online platforms, are expected to adopt POS devices and integrate eWallet solutions.

The widespread adoption of electronic payment acceptance in Iraq will contribute to a significant increase in financial inclusion. This transformative shift will empower governmental entities, businesses, and citizens to become active participants in the electronic payment ecosystem. With more bank accounts, eWallet accounts, and cards, individuals and businesses will enjoy greater convenience, security, and efficiency in their financial transactions.

This article is brought to you in collaboration with Wedo. Wedo is your one-stop destination for educational services and strategic business consulting in Iraq & beyond. From comprehensive training programs to expert guidance on investment readiness preparation and board establishment.

Dr. Bayar Shahab

Dr. Bayar Shahab, the dynamic Founder of Wedo, brings a Ph.D. from the renowned University of Rome Tor Vergata. With infectious enthusiasm, he's an experienced entrepreneur skilled in banking, fintech, tech, agriculture, business development, consulting, and training. Bayar leads impactful projects in Iraq, infusing business with technology know-how, reviving true entrepreneurial spirit, and strategy-driven business consulting.

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