EghtesadOnline: The Central Bank of Iran has backtracked on its directive that was supposed to be implemented from Sunday and aimed at boosting information safety in the banking system by making end-to-end encryption for card not present transactions mandatory.
The directive announced on Jan. 26 also indicated that transactions aimed at paying for mobile recharges that are conducted on the unsafe platform of Unstructured Supplementary Service Data communications protocols were not to be accepted and processed neither in the Shetab interbank nor the Shaparak payment settlement networks.
That meant that in addition to a number of payment service providers, mobile network operators MCI and MTN-Irancell that own 98% of the mobile carrier market combined stood to lose the most.
This prompted a number of lawmakers to send a letter to CBI, asking it to scrap the measure. But more importantly, the Communications Regulatory Authority with the Telecoms Ministry directly called on CBI to postpone the measure for four months as Telecoms Minister Mohammad Javad Azari-Jahromi has engaged in negotiations, Financial Tribune reported.
Apparently Azari-Jahromi came out triumphant in his negotiations with CBI Governor Valiollah Seif and tweeted late Saturday that CBI’s initiative is “temporarily” nullified as mobile carriers have made new commitments.
On Sunday, the minister visited ISNA news agency’s headquarters –that had ran an article criticizing those resisting the CBI move– and said mobile carriers have promised to guarantee USSD safety and if they fail to do so, “our opinion will also certainly be that this method will not continue”.
Azari-Jahromi reiterated that the central bank’s initiative is essentially correct, as it aims to boost information that is currently unsafe in the USSD platform from “telecoms towers to the banking system”.
The minister, however, added that a big portion of the mobile recharge services rendered by mobile operators is currently based on USSD while POS devices that make the services more costly for the people have the second biggest share.
According to Azari-Jahromi, implementing the directive now would lead to a “reduced share for ICT market and disadvantage the people” and that is why the Telecoms Ministry “cannot remain indifferent” to the situation.
According to the minister, extensive negotiations between the two sides have led to the Communications Regulatory Authority promising measures to boost USSD safety while a committee will be formed to implement CBI’s wishes in this regard.
Azari-Jahromi concluded by acknowledging the behind-the-scenes competition driving the argument where “each of the two sides [banking system and mobile carriers] is trying to grab the other’s market share”, but assured that “the main issue is that the people should not get hurt”.