Can the government convince Iraqis to use electronic payment cards?

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[size=52]Can the government convince Iraqis to use electronic payment cards?[/size]

[size=45]The optimism of citizen Issam Bassem Al-Jubouri from the Iraqi capital, Baghdad, appeared clear after he registered for a new electronic payment card through one of the branches of Rafidain Bank (government) with financial fees amounting to 10 thousand dinars ($7.5) and a receipt time of 15 minutes.[/size]
[size=45] Follow/Range[/size]
[size=45]The optimism of citizen Issam Bassem Al-Jubouri from the Iraqi capital, Baghdad, appeared clear after he registered for a new electronic payment card through one of the branches of Rafidain Bank (government) with financial fees amounting to 10 thousand dinars ($7.5) and a receipt time of 15 minutes.[/size]
[size=45]Al-Jubouri says that this step is very important, especially for home and electronic shopping, promotion through social networking sites, and also payment when filling his personal car with gas from government and private stations. Stressing the importance of this step to reduce cash flow in the market. In June 2023, the Central Bank of Iraq announced that the Iraqi Council of Ministers’ Decision No. (23044) for the year 2023 had entered into force, which was to increase the number of electronic payment devices in government institutions and the private sector to enhance the culture of electronic payment and collection, and reduce the use of paper money in collection and commercial transactions. .[/size]
[size=45]Does the experiment work?[/size]
[size=45]For his part, economic academic Mustafa Akram Hantoush believes that Iraq's experiment with electronic payment cards will succeed after it had previously dealt in cash for years. Speaking to Al Jazeera Net, Hantoush explains the success of this experiment by the presence of a large amount of cash in the market, and everyone suffers from a loss of liquidity due to the risks of burning, damage and theft.[/size]
[size=45]Hantoush also pointed out that “Iraq previously issued more than 10 million electronic cards from companies affiliated with government banks, or from other payment companies, valid for 7 days after the launch of monthly salaries. Until the government trend today has become to continue working with the card throughout the month, provided that 20% of the volume of monthly incentives and rewards is reserved within the card, and not of the size of the employee’s basic salary in order to purchase electronically, since the card has a zero pricing policy, which will help in issuing (20-25 ) One million cards soon,” and Hantoush stresses the importance of increasing electronic payment devices from 23,000 to 800,000 devices across Iraq to increase usage levels.[/size]
[size=45]Weak marketing culture[/size]
[size=45]On the other hand, specialists see a great weakness in the banking marketing culture inside Iraq, which prompted economic researcher Haider Falih Al-Rubaie to urge the Central Bank to strengthen it. Increase the use of electronic payment cards to enhance bank credit and transfer the wealth stored in homes to a guarantor force in generating demand for money for transaction purposes and supporting... The economic activity.[/size]
[size=45]Al-Rubaie added, “Enhancing banking culture is no longer a luxury, but a necessity to encourage citizens to plan and save for their future, and protect themselves from crises or emergencies that occur at any time, in addition to developing their financial capabilities to cope with the tremendous global development in the field of financial technology.”[/size]
[size=45]Al-Rubaie pointed out the importance of updating the information about the services provided by the two banks (governmental and private) so that it is clear and easy to understand and can be accessed without difficulty by providing sufficient guidance means inside the bank’s halls and branches, and on the bank’s official website.[/size]
[size=45]The volume of deposits in government and private banks is (128 trillion dinars), distributed between private and government banks, as there are (72 private banks) in Iraq, including (19 banks) on the US Treasury Department’s sanctions list, while the volume of deposits in private banks is about 14. One trillion Iraqi dinars ($10.5 billion). As for the six government banks, the volume of deposits is about 114 trillion dinars ($87 billion), meaning that 90% of the volume of deposits is in government banks.[/size]
[size=45]Hoarding inside homes[/size]
[size=45]The financial advisor to the Iraqi government, Dr. Mazhar Muhammad Saleh, estimated in statements that there are more than 95 trillion Iraqi currency held by individuals outside the banking system, that is, homes and other places, indicating that the phenomenon of hoarding does not provide flexible financial leverage at a low cost to finance economic activity because it causes a low ability to transfer money. Desired savings for desirable investments, due to the stagnation of liquidity outside banks, as hoardings constitute a deduction from the national income cycle, according to Counselor Saleh.[/size]
[size=45]While the researcher in banking affairs, Omar Al-Halbousi, attributes the reason for the reluctance of Iraqi citizens to deposit their money in Iraqi banks to a group of factors, including the citizen’s lack of confidence in the banking sector, especially after the collapse of a group of banks without returning depositors’ money despite the passage of years.[/size]
[size=45]Al-Halbousi explains other factors, including political interference in the banking sector. He also points out that “the weakness of the Central Bank of Iraq in controlling and supervising the work of banks constituted another factor for hoarding.”[/size]
[size=45]According to Al-Halbousi, the ownership of private banks by people accused of corruption or external parties is a factor in household hoarding, in addition to the imposition of American sanctions on a group of private banks to constitute another factor that supports the trend of hoarding. With regard to government banks, the repeated corruption scandals constituted one of the reasons. Reluctance too.[/size]
[size=45]In order to withdraw the mass of cash stored in homes, the financial advisor to the Iraqi government, Dr. Mazhar Muhammad Salih, suggests that it be done by replacing the electronic payment system, which will place cash income within the banking system cycle effectively and continuously, thus reducing the phenomenon of cash leakage outside Iraqi banks.[/size]
[size=45]Saleh believes that the expansion of electronic payments and the subsequent expansion of bank accounts will reduce the liquidity risks to which banks are exposed due to the state of uncertainty in maintaining ineffective cash surpluses for lending and facilitating credit operations. The phenomenon of liquidity risks will decrease, and will serve the interest of encouraging and expanding the phenomenon of cash credit and granting loans in a flexible manner. .[/size]
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