Cash Use Declines as Electronic Transactions Surge
EghtesadOnline: In light of the significant surge in the number of electronic transactions, the ratio of cash and coins to liquidity in Iran has declined by 3.5% in the past four years, announced the CEO of Shaparak Company–the entity in charge of Iran’s payment network.
“Despite all the imposed limitations and obstacles, electronic payment services have notably improved in the past two decades and currently their role in the country’s economy cannot be ignored,” Mohsen Qaderi was also quoted as saying by the news headquarters of the Seventh Exhibition of Electronic Banking and Payment Systems.
Shaparak’s CEO noted that expanding and improving the quality of electronic payment services require investments in the sector, as well as transparency and reforms concerning the regulations of transaction fees.
According to Qaderi, the ratio of cash and coin in circulation to the overall liquidity stood at 6% in 2013 while the ratio has dropped to 2.66% by the end of the previous fiscal year (March 20, 2017), Financial Tribune reported.
The ratio of the total amount of Shaparak’s transactions to the total value of Iran’s gross domestic product did not exceed 71% in the summer of 2014 while the figure surged to 111% in November 2016.
“Supervising payment service providers and payment network, establishing Shaparak’s switch as the integrated switch, continuous research and planning for improving electronic payment services, preparing the ground for complying with global standards and maintaining the security of payment network have been among Shaparak’s main agendas in the past few years,” he said.
Shaparak’s CEO noted that as a result of Shaparak’s follow ups and measures, the compliance of domestic PSP companies with standards that stood below 20% four years ago increased to above 90% last year. By the end of the previous fiscal, PSP’s security compliance reached 95% while it did not exceed 35% three years ago.
He also mentioned that Shaparak’s transactions in the past four years have dramatically surged from 200 million per month in 2013 to 1.4 billion per month in 2017.
Qaderi emphasized the necessity of reforming the system of electronic transaction fees since maintaining their quality is impossible without further investments.
“As private-sector companies should invest in this industry to minimize the government’s role as much as possible, investments need to be economically justified. This definitely underlines the need for transparency and for reforming the system of transaction fees,” he said.