Central Bank of Iran to unveil contactless payment system

Central Bank of Iran (CBI) is working on a project to enable contactless payments in shops and stores as it seeks to reduce costs to users and banks in the country.

CBI Governor Abdolnasser Hemmati said that the bank would soon unveil payment systems that solely use mobile phones and eliminate the need to use cards for day-to-day purchases in shops.

Contactless payments use a mobile phone technology known as the near-field communication (NFC) to enable transfer of encrypted data between devices without any need for cards that use magnetic strips to process such communications. 

NFC systems are normally used for limited transactions in point-of-sales terminals to pay for goods and services.

Hemmati said contactless payment would add to the ease-of-use of electronic banking systems in Iran while it would help cut contagion during the current coronavirus pandemic by reducing the risk of catching the disease.

There have been widespread calls in Iran for such payment methods to be rolled out as people argue that the systems eliminate cards and reduce costs incurred on the banks and their customers.

CBI’s push to launch the NFC payment system also comes as it seeks to reduce the excessive use of plastic cards that are normally supplied from abroad.

However, the new system is expected to face logistical hurdles in Iran as it requires the installation of NFC-enabled devices in stores and shops across the country.