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EghtesadOnline: Central Bank of Iran is to unveil an instant payment system which will replace the existing card-to-card transfers.

Unlike banks, payment service providers (PSPs) are concerned about the new move simply because they have invested substantial amounts to promote the present method.

The new system is an interbank service under CBI auspices and will handle instant settlement of payments irrespective of the size of the amounts. 

The primary aim of the system is to enhance the security of bank customers, the CBI has said. "Bank card numbers are sensitive information better kept private, whereas bank account numbers can be easily shared."

Using the system, users can transfer up to 150 million rials each day, which is considerably higher than the daily cap for card-to-card transactions.

The system also has other advantages like reducing payment costs, detecting fraud and creating bigger space for innovative products. 

Under the existing system money transfers are added to the destined card instantly and the CBI completes the processing and clearing at the end of each business day.

Mohammad Sadeghi, ENBank's deputy for information technology, says the PSPs would be harmed once the new system is operational. 

However, "the CBI is mindful of this and possibly come up with a solution to support the payment companies,”  he told Way2pay. 

According to the banker, the CBI would unveil the platform in the near future. "Banks are ready for the new system…but I have no idea about the PSPs."

Sadeghi said "The existing system, dominated by payment companies, is a major risk to the country's banking system.”

Mohammad Ali Mahmoudzadeh, a former head of Sadad Company, affiliated to Bank Melli Iran and one of the 12 PSPs in the market, said replacing card-to-card method would impose huge costs and negatively influence the business of PSPs. 

"We have no role in such decision-making process…PSPs rely on regulatory bodies for their income and prefer to play by the rules," he said. 

He had reservations about the public acceptance of the new system, "People will not welcome the system as it seems not to be as user-friendly as the existing method, which was designed following demands from Iranian cardholders."

Iranian banks on average process 450 to 500 million interbank transactions a month.

Card-to-card transactions are handled by the CBI's SAHAB platform. SAHAB is a card-based fund transfer system connected to SHETAB (the national interbank network) center, allowing customers to send money to any SHETAB-member bank using their own cards.

The instant payment completes the ecosystem of account-based transactions. Customers can transfer up to 1 billion rials a day without referring to [other] branches. Large transactions are being handled by SATNA and the new system is to cover transactions from 1 billion to 150 million rials.

SATNA, internationally known as Real Time Gross Settlement, was established in 2006 for high-value interbank transaction settlement and started accepting inter-customer transactions from 2008.  


CBI Payment