Market Research Logo

The Cards and Payments Industry in Iran: Emerging trends and opportunities to 2020

The Cards and Payments Industry in Iran: Emerging trends and opportunities to 2020

Summary

Iran’s payment cards market recorded robust growth in terms of cards in circulation, transaction volume, and value during the review period (2012-16), despite international sanctions. The growth was primarily supported by the high banked population, Iranian government initiatives to encourage electronic payments, the country’s improved banking infrastructure, and a consumer shift towards card-based payments.

Iranian government has taken a number of initiatives to encourage electronic payments and reduce dependency on cash payments. Consumers are charged a fee for using cash to pay utility and mobile bills. Many banks refuse to accept bill payments through cash, forcing consumers to use cards. Barcode readers and POS terminals are installed in branches to facilitate bill payments using cards. Also, many government organizations pay bonuses to their employees in the form of gift cards which can only be used for making purchases but not for cash withdrawals.

Banks in Iran were reconnected to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system in February 2016, as international sanctions were lifted. This was based on a Joint Comprehensive Plan of Action reached by the P5+1 countries (the US, the UK, France, China, and Russia), the EU, and Iran in July 2015, regarding Iran’s nuclear program. This allowed banks in Iran to resume cross-border transactions with foreign counterparts. Almost all banks in Iran are now connected to the SWIFT system, while the rest are in the process of doing so.

Debit cards remained the most widely used payment card type during the review period and accounted for 99.4% of the total transaction volume in 2016. Debit card penetration in Iran stood at 337.3 cards per 100 individuals in 2016, which was by far the highest compared to regional peers the UAE (109.3), Bahrain (97.4), Kuwait (93.8), Oman (85.8), Saudi Arabia (75.8), and Lebanon (33.4). Israel had the lowest debit card penetration of 10.3.

Debit cards recorded the fastest review-period CAGR of 24.95% in terms of transaction volume. Growth was supported by the continued migration of low-value cash payments to debit cards, government efforts to encourage retailers to accept card-based payments, and banks’ promotional activities to encourage retailers to install POS terminals.

The report The Cards and Payments Industry in Iran: Emerging trends and opportunities to 2020 provides top-level market analysis, information and insights into the Iranian cards and payments industry.

In depth, this report provides the following -

  • Current and forecast values for each market in the Iranian cards and payments industry, including debit and credit cards.
  • Detailed insights into payment instruments including payment cards and cheques. It also, includes an overview of the country's key alternative payment instruments.
  • Analysis of various market drivers and regulations governing the Iraniann cards and payments industry.
  • Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards.
Companies mentioned in this report: Bank Markazi Iran, Visa, Mastercard, JCB, China UnionPay, Bank Mellat, Bank Saderat Iran, Tejarat Bank, Bank Melli Iran, Bank Sepah, Parsian Bank, EN Bank, Iran Maskan, PayPing.

Scope
  • Iranian banks were disconnected from the SWIFT system in March 2012, due to international sanctions placed on Iran by the US as a result of its nuclear program. Banks in Iran were reconnected to the SWIFT system in February 2016, as the sanctions were lifted. This allows banks in Iran to resume cross-border transactions with foreign counterparts. This is anticipated to support the growth in the country’s cards and payments industry.
  • The lifting of sanctions is expected to encourage more foreign banks to expand operations in Iran. South Korea’s Woori Bank opened a representative office in May 2016. In April 2016, the governors of the Central Bank of Iran and the National Bank of Kazakhstan signed a memorandum of understanding on the expansion of banking ties between Iran and Kazakhstan. Furthermore, Belgium's KBC Bank and Germany's DZ Bank have started to handle European clients doing business in Iran.
  • To stimulate consumer spending, the Central Bank of Iran introduced a new guideline in September 2016, under which local financial institutions are required to issue low-cost credit cards as part of its nationwide credit card scheme. The credit cards are offered in three types: Gold with a limit of $15,443.60 (IRR500m), Silver with a limit of $9,266.10 (IRR300m), and Bronze with a limit of $3,088.70 (IRR100m). No interest rate is levied on card holders if they clear their debts within a month. Card holders are also allowed to repay their debt in 12-18 instalments with annual interest capped at 18%.
Reasons to buy
  • Make strategic business decisions, using top-level historic and forecast market data, related to the Iranian cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Iranian cards and payments industry.
  • Assess the competitive dynamics in the Iranian cards and payments industry.
  • Gain insights into marketing strategies used for various card types in Iran.
  • Gain insights into key regulations governing the Iranian cards and payments industry.


  • Executive Summary
    • Market overview
    • Key facts
      • Table Iran: key facts, 2016
      • Table Iran: regional benchmarking of payment cards, 2016
    • Top five industry events
  • Payment Instruments
    • Current payment environment
      • Table Figure 1: Iran: payment instrument shares by transaction value (%), 2012 vs 2016
      • Table Figure 2: Iran: payment instrument shares by transaction volume (%), 2012 vs 2016
  • Alternative Payments
    • Alternative payment instruments
      • ZarinPal
      • Jiring
      • PayPing
      • Sekeh
  • Regulations in the Cards and Payments Industry
    • Regulatory framework
    • Anti-money laundering
    • Foreign direct investment regulations
      • Table Iran: mode of entry of foreign banks
  • Analysis of Cards and Payments Industry Drivers
    • Table Figure 3: Iran: population and economic indicators
    • Table Figure 4: Iran: ATMs, POS terminals, and household consumption
  • Payment Cards
    • Table Figure 5: Iran: payment card transaction value and cards in circulation, 2012–20f
  • Debit Cards
    • Debit card market analysis
      • Table Figure 6: Iran: debit card penetration and turnover per card
    • Competition in the debit card market
      • Table Figure 7: Iran: debit card scheme and issuer transaction value shares, 2016
    • Debit card comparison
      • Table Iran: debit card comparison and key features, 2016
  • Pay-later Cards
    • Pay-later card market analysis
      • Table Figure 8: Iran: pay-later card penetration and turnover per card
    • Competition in the pay-later card market
      • Table Figure 9: Iran: pay-later card scheme and issuer transaction value shares, 2016
    • Pay-later card comparison
      • Table Iran: credit card comparison and key features, 2016
  • Prepaid Cards
    • Table Figure 10: Iran: prepaid cards in circulation, 2012–20f
  • Appendix
    • Abbreviations and acronyms
    • Supplementary data
      • Table Iran: payment instrument transaction values (IRRqn), 2012–16e
      • Table Iran: payment instrument transaction values ($bn), 2012–16e
      • Table Iran: payment instrument transaction volumes (millions), 2012–16e
      • Table Iran: payment cards in circulation by type (millions), 2012–20f
      • Table Iran: volume of payment card transactions (millions), 2012–20f
      • Table Iran: value of payment card transactions (IRRtn), 2012–20f
      • Table Iran: value of payment card transactions ($bn), 2012–20f
      • Table Iran: debit cards in circulation (millions), 2012–20f
      • Table Iran: debit card transaction volumes, 2012–20f
      • Table Iran: debit card transaction values (IRR), 2012–20f
      • Table Iran: debit card transaction values ($), 2012–20f
      • Table Iran: debit cards in circulation by scheme (millions), 2012–16e
      • Table Iran: debit card transaction values by scheme (IRRqn), 2012–16e
      • Table Iran: debit card transaction values by scheme ($bn), 2012–16e
      • Table Iran: debit card transaction values by issuer (IRRtn), 2012–16e
      • Table Iran: debit card transaction values by issuer ($bn), 2012–16e
      • Table Iran: pay-later cards in circulation (millions), 2012–20f
      • Table Iran: pay-later card transaction volumes, 2012–20f
      • Table Iran: pay-later card transaction values (IRR), 2012–20f
      • Table Iran: pay-later card transaction values ($), 2012–20f
      • Table Iran: pay-later cards in circulation by scheme (000s), 2012–16e
      • Table Iran: pay-later card transaction values by scheme (IRRtn), 2012–16e
      • Table Iran: pay-later card transaction values by scheme ($bn), 2012–16e
      • Table Iran: pay-later card transaction values by issuer (IRRbn), 2012–16e
      • Table Iran: pay-later card transaction values by issuer ($m), 2012–16e
      • Table Iran: prepaid cards in circulation (millions), 2012–20f
    • Definitions
      • Table Key definitions
    • Methodology
    • Bibliography
    • Further reading

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook

Share this report