Small traders to receive bank card for digital payments

BAGHDAD, January 23 — In a move to modernize financial transactions and support small-scale traders, Iraqi banking branches, as confirmed by an official government source on Tuesday, are now offering electronic payment cards. These cards, designed for import transactions by small businesses, have a monthly limit of $100,000.

This initiative is part of a broader effort to reduce the reliance on physical U.S. dollars in the Iraqi economy. The process for issuing these electronic cards to small traders includes several steps. Payment companies must first seek approval from the Central Bank of Iraq to introduce the ‘Merchant’ card. The use of these cards must comply with the Central Bank’s foreign exchange controls for 2023, ensuring adherence to the $100,000 monthly cap, which may be adjusted based on the performance of the program.

The cards are intended for procuring goods and services from recognized suppliers, listed on predefined ‘white lists.’ Payment companies are also required to conduct due diligence in line with international standards, including compliance with the main international ban lists of the United Nations, the Office of Foreign Assets Control, and the European Union.

Small traders will deposit their funds in Iraqi dinars at various Iraqi bank branches, transitioning from traditional cash-based transactions to a more digital and regulated financial environment.

This initiative comes in the wake of recent U.S.-led efforts to crack down on money laundering and the illicit flow of U.S. dollars, particularly to Iran, through the Iraqi banking system.

The Iraqi government and the Central Bank of Iraq are thus balancing these international pressures with the need to modernize and digitize their economy, a shift that includes the introduction of electronic payment cards for small traders.

Financial experts optimistic about success of digital banks in Iraq

Rafidain Bank implements anti-money laundering and terrorism financing systems