EghtesadOnline: The Central Bank of Iran is focused on creating new models of payments involving mobile phones and boost the security of existing ones, the head of the bank's Payment Systems Department said.
Davoud Mohammad Beigi added that micro payments have currently emerged as one of the most problematic areas in the Iranian payment system, because almost all of them are processed online, which entails significant costs.
"At present, transactions are processed easily, but they mostly take place online so to safeguard the interests and data of customers, new models of payment must be put in place for mobile phones," he was quoted as saying by the CBI-affiliate Monetary and Banking Research Institute's website.
The official noted that in light of the high penetration ratio of mobile phones as a widely available tool, the central bank aims to introduce payments based on tokenization in the next fiscal year that begins on March 21,. according to Financial Tribune.
"In order to expand and popularize these instruments, we need to create coordination between all beneficiaries and devise standards," he added.
The central bank is to make a concerted move toward adopting the Europay, MasterCard and Visa technology, and making bank cards smarter, but according to Beigi, two major hurdles impede that goal.
"The first is that the banking system does not yet have the comprehensive infrastructure to support these payments and secondly the public and other beneficiaries must favor them," he said.
Iran's biggest two-day annual electronic banking conference organized by MBRI, which is to open in Tehran on Sunday, will among other things focus on EMV technology as well as new models of payments.
The CBI official emphasized that popularizing a culture of using mobile phones for making payments will create the opportunity of employing near-field communications technology more profusely in offline mode, which also boosts safety.
A number of Iranian banks currently offer NFC services, but the payment method has yet to become mainstream, as few people employ it on a regular basis.
According to Beigi, the central bank will announce its regulatory stance on two additional modes of financial technology firms, a move that will steer the country's payment system toward further diversification.
The monetary regulator has envisioned an overarching path for fintechs and cryptocurrencies entailing six regulatory frameworks and guiding documents, which will be released by March 2019.
The initial two documents dealing with payment initiators and facilitators have already been published, the third covering micropayments is to be unveiled in the coming days and the fourth, dealing with the framework for the operations of account information managers, is expected by Jan. 21.
The CBI's deputy for payment systems also stressed the necessity of banks and fintechs developing new electronic wallets that will reduce the need to carry bank cards for online and offline payments.
"But that does not mean that bank cards are to become obsolete in the near future, but that the customers will have more choices," he said.
In conclusion, Beigi referred to the security of payments as one of the "redlines" of the central bank and Iran's payment systems, such that the regulator has always considered transaction security crucial in dealing with payments and in offering new services.
In addition to the intrinsic importance of ensuring safety in payments, the central bank is extremely wary of any case that could potentially lead to people losing their capitals, mainly because of the lengthy and detrimental case of uncertified credit institutions that absorbed significant volumes of liquidity before finally being dismantled by CBI.