Activating electronic payment.. Does the citizen trust Iraqi banks?

by **Rocky** Mon 08 May 2023, 2:06 pm

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Activating electronic payment.. Does the citizen trust Iraqi banks?

by Rocky Mon 08 May 2023, 2:06 pm

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MONDAY, 08-05-2023, PM 5:23
KARRAR AL-ASADI

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With the government’s tendency to adopt the electronic payment system, and the issuance of continuous directives in this regard, the question arises about citizens’ confidence in banks in light of the problems that have been raised recently and the imposition of penalties on some of them, and here specialists and a government advisor confirmed that the depositors’ money will be under the protection of several systems and an insurance company, as well About the protection provided by international card companies, and while they indicated that this shift in dealing will end the era of banknotes and their damage and printing again, they indicated that the matter needs strong education campaigns in order to circulate to everyone.
And banking expert Abd al-Rahman al-Sheikhly says, “The POS card is not linked to a specific bank, as the merchant is the one who is linked to the bank, and the card is linked to electronic payment companies, as the latter is the one who prints the card and works to distribute it and is the guarantor for it, not the bank, because the latter’s job is to open the account for the merchant.” Just".
Al-Sheikhly explains: "The citizen who bought the card from the electronic payment companies and deposited the balance with it with a certain amount, when he deals with merchants who carry the devices for this card, the money is withdrawn from the merchant's card, and thus the process is linked to the bank's financier only, while the citizen buys the card from Electronic payment companies, which are the Master Card or Visa Card, in addition to that there is an intention to develop them to include other salary localization companies, but this takes a long time from mass mobilization and education in order for the citizen to be aware of how to dispose of the salary, and this comes at a next stage.
And he added, “The real guarantor of this process for the citizen is the company, and this process is followed in all countries of the world, as it saves a lot of effort for citizens, such as carrying and transferring money and limiting theft or loss, in addition to the issue of banknotes being damaged and reprinted, which costs the state a lot.” ".
And Al-Sheikhly points out, “When the money is with this card, there will be no cash circulation between banks directly, but rather through electronic payment, and the process of transferring funds will be by automating electronic devices that will take place at the present time, and the Central Bank has been working on the project since In 2019, he directed banks to work and associate with electronic payment companies, but so far there is no commitment to these directives.
Yesterday, Sunday, the Prime Minister, Muhammad Shia Al-Sudani, directed ministries and agencies not associated with a ministry and all governorates to expedite the implementation of points of sale with the electronic payment system (POS) and to make unremitting efforts for this.
It is noteworthy that the government, in cooperation with the Central Bank, tended to activate electronic payment recently, during the procedures followed to reduce the discrepancy in the exchange rate of the dollar, as the packages of procedures included activating this service, and specifying it in dinars only.
And the electronic payment experiment began at gas stations, and they were provided with the necessary devices, after the Central Bank determined the commission collected, especially if the payment and receipt were between different banks.
In addition, and regarding the citizen's confidence in banks, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirms that "discrimination between banks is made according to the credit rating A, B, or C, or it may be without a rating for the approved bank."
And Saleh added, "The payment card, in the end, cannot move without having a bank account in the first place. All withdrawal and deposit movements appear on the bank account, and depositors' accounts with banks are insured with the Iraqi Deposit Insurance Company."
And the Central Bank of Iraq announced, in 2020, that it had launched a money transfer service between credit cards, and set the one-time transfer ceiling at 400 thousand dinars or its equivalent in US dollars, while the limits of the amounts transferred during one month reach two million dinars or its equivalent in US dollars.
Although some banks in Iraq issue credit cards, their use remained in a limited range, such as receiving external transfers, for example, and ATMs are usually located near bank branches only, and are not widespread in most local markets, which prompted citizens to rely on On pre-filled cards for use on Internet sites, as payments or purchases.
Iraq includes, according to the latest statistics published on the Central Bank of Iraq website, 80 operating banks, of which 62 are local and 18 banks are branches of foreign banks.
And the deputy governor of the Central Bank, Ammar Hamad, said earlier this month that the number of electronic payment cards increased from 10 million to more than 14 million cards, with the increase of ATMs to more than 1,500 devices, and points of sale to more than 7 thousand.
In turn, and regarding the guarantees that the citizen earns, the researcher specialized in economic affairs, Nabil Al-Tamimi, explains that “there is an institution in the Central Bank called the Iraqi Deposit Guarantee, and it specializes in guaranteeing deposits and amounts that depositors place in the bank, whether these deposits are small or large, so the Central Bank announced A new system, a short while ago, through which all activities that take place in banks will be monitored, and this system may remedy any suspicious operation carried out by banks, such as large withdrawals, successive losses, or high debts, and thus the central bank will know the amount of risks in banks.
Al-Tamimi added, "Governmental banks, such as Al-Rasheed Bank and Al-Rafidain Bank, will be among the banks that work on POS technology and other technologies that banks and customers benefit from, including card users who can choose several banks, whether private or government."
He believes that "it is necessary to reach this stage in order to conduct internal financial transfers and purchase and sale transactions, and it is possible that the transition will be quick, especially since the government's move is the only one that accelerates this file."
The numbers announced by Hamad are small compared to the number of adults in Iraq, which is estimated at more than 25 million people, according to the Electoral Commission database, while most countries in the world and neighboring countries depend entirely on electronic payment and ATMs are widely spread in them and cover almost every alley. In addition, most shops and all professions rely on electronic payment due to the availability of devices they have, which they obtain from banks.
It is noteworthy that the Iraqi banking sector is neglected by citizens who have lost confidence in it, and according to World Bank figures, only 23 percent of Iraqi families have an account in a financial institution, which is among the lowest in the Arab world, especially since the owners of those accounts are state employees. Those whose salaries are distributed to public banks at the end of each month, but these salaries also do not remain long in the accounts, as queues soon form in front of the banks of employees who withdraw their salaries in cash and prefer to keep them in their homes.
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Activating electronic payment.. Does the citizen trust Iraqi banks?

Activating electronic payment.. Does the citizen trust Iraqi banks?

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