A strategic partnership between MasterCard and the Central Bank of Iraq to develop payment systems
A strategic partnership between MasterCard and the Central Bank of Iraq to develop payment systems
Monday 19 April 2021 | 12:29
MasterCard signed a partnership agreement with the Central Bank of Iraq to digitize the payment systems in the country, in a move aimed at enhancing financial inclusion, advancing social and economic development, reducing the risks of the shadow economy, and accelerating progress towards a cashless society. The partnership aims primarily to build an efficient, reliable and secure payment system, which will start with the education sector and then expand to other sectors. Not only will this reduce the use of cash, enhance digital payments and increase government revenues, but also overcome significant operational and administrative deficiencies in the education sector by reducing the excessive use of manual processes. It is noteworthy that the population of Iraq, of 40 million, depends on cash payments on a large scale, as these payments are used in 99.8% of personal consumption spending transactions that amounted to $ 122 billion in 2019. However, this does not reduce the great opportunities available for digital transformation, as the country has a large smartphone penetration rate of up to 70%, and 22% of the population falls within the category of tech-savvy youth between the ages of 15 and 24. In addition, most students’ parents and guardians have limited options for payment methods, as the majority of students use cash for all their payments. In light of the fact that parents or students do not have bank accounts, or do not use online payment services, it is very important to work to encourage a change in the way school fees are paid, which will positively affect the payments system and the economy as a whole. Commenting on the partnership, Mrs. Doha Abdel Karim Mohamed said; Director General of the Payments Department at the Central Bank of Iraq: The work that MasterCard has done in Iraq over the past few years has left a noticeable impact on the country’s financial services sector and greatly enhanced levels of financial inclusion. We, in the Central Bank of Iraq, are fully aware of the vital role that the digital economy plays at this stage, especially enabling the formal economy to grow through a new payment system that is transparent, simple and effective. We also look forward to working with MasterCard to advance the digital transformation process in Iraq, starting with the education sector. ”Khaled Al-Jabali, Regional President of MasterCard for the Middle East and Africa, said:“ Establishing a digital payments system is very important because it encourages economic development and contributes to Reducing the use of cash and the shadow economy as well. Our work with the Central Bank of Iraq focuses on improving the efficiency of the economy as a whole, starting with educational institutions, by giving students, families and merchants a safer, easier and more comfortable way to pay. The partnership between MasterCard and the Central Bank of Iraq is an important shift that allows the development of an integrated digital payment system that covers the basic pillars of the economy in Iraq, including the use of public policies and systems to curb the shadow economy, the comprehensive modernization of the payments system, and the digitalization of key value chains. These measures include government revenues and payments, consumer spending, as well as business purchases and salary payments. The partnership between MasterCard and the Central Bank of Iraq is an important shift that allows the development of an integrated digital payment system that covers the basic pillars of the economy in Iraq, including the use of public policies and systems to curb the shadow economy, the comprehensive modernization of the payments system, and the digitalization of key value chains. These measures include government revenues and payments, consumer spending, as well as business purchases and salary payments.
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