They made half a billion in a year… e-cards become a “dollar smuggler” after the remittance loophole was closed in Iraq.
They made half a billion in a year… e-cards become a “dollar smuggler” after the remittance loophole was closed in Iraq.
2025-06-01 | 01:47
Revealed The Wall Street Journal The American, today, Sunday, revealed details that led to reducing the ceiling on withdrawals and spending from electronic cards outside Iraq And many of them were also stopped, noting that there was a jump of about 3000% in MasterCard and Visa Card transactions in Iraq, as a result of armed factions and dollar smuggling entities resorting to…Iran…by resorting to these cards after losing the financing loophole through import transfers.
The newspaper said, “Just two years ago, the Iraqi market represented a marginal value for my company. “Visa Mastercard, which was generating less than $50 million per month in cross-border transactions at the beginning of 2023, saw its value explode to nearly $1.5 billion in April of the same year, an increase of nearly 2,900% in a short period.
The newspaper indicates that what has changed, according to American and Iraqi officials and documents, is that armed factions were extracting dollars through these cards, via the payment networks affiliated with Visa and MasterCard, after they were closed. Department of the Treasury The US uncovered a major loophole that was being used to fraudulently obtain dollars via foreign transfers.
The newspaper explained that the factions found a plan to use electronic payment cards after this loophole was closed, but The treasury Card-issuing companies reported that armed groups were involved in the use of these cards. It took months for the companies to reduce financial transactions. These transactions declined, but remained between $400 million and $1.1 billion per month until the beginning of this year. The Central Bank even set a maximum of $300 million per month recently to control these payments.
The newspaper explained that due to the existence of an official and an unofficial rate, people were buying electronic cards and then withdrawing the funds from dollars outside. Iraq In other Middle Eastern countries, the money is exchanged at the official rate. They then send the funds back to Iraq to be converted into dinars at the market rate, earning profits of up to 21%. The result has been a thriving business for powerful Iraqi factions.
The newspaper confirms that Visa and Mastercard made profits from these transactions, ranging between 1% and 1.4%. It is estimated that Iraqi cardholders participating in this scheme made profits of approximately $450 million in 2023 alone, while foreign cards collected $120 million alone. Revenues are estimated to have grown by 60% in 2024.
The newspaper says that in recent days, the Treasury Department has officially requested Central Bank of Iraq More than 200,000 cards have been blocked by faction members over fraud concerns, as officials begin…Federal Reserve The US Treasury Department demanded that Visa and Mastercard explain the increase in transactions in Iraq in 2023. They held regular meetings on the Iraqi market, including with officials from the Central Bank of Iraq in 2024 and early this year, and card companies began taking concrete action in March.
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