BAGHDAD, Iraq — In Iraq's cash-driven economy, the Communications Ministry and head of the Central of Bank are getting input on a mechanism that would allow banks and shops to further facilitate the use of debit and credit cards.
"The opportunities available for the Iraqi banks are suitable to embark on electronic system and establish a strong infrastructure by making use of technology which is helpful for banking and money related affairs," Iraqi Central Bank Governor Ali al-Allaq told Rudaw on Friday.
Banks are increasingly utilizing ATM cards to distribute salaries to employees in major cities, but most are still paid in hard cash via the Iraqi dinar or US dollar — especially outside major cities.
According to data from the Baghdad Banks Group, only eight shops use bank card scanners for the sale of their goods in Baghdad. In the Kurdistan Region of Iraq, some hotels, airports, and shops catering to foreigners accept debit or credit cards.
A shop owner in Baghdad explained that customers are not familiar with paying with plastic cards via card scanners. However, Saad Abdulla detailed that as the owner of Nakhla Supermarket he would prefer to accept bank cards.
"The electronic system is better and we prefer it. Because maybe sometimes you receive counterfeit banknotes and you do not know it [at the time]," he explained.
Iraq offers banknotes in the 250, 500, 1,000, 5,000, 10,000, 25,000 and 50,000 dinar denominations. However the bills are easily torn and worn, making the detection of counterfeiting more difficult. Many storefront exchange shops utilize digital bill counters — some with scanners — to try to thwart counterfeiters with varying degrees of success. Additionally, vendors are often hesitant to accept US currency printed prior to 2006.
"Or sometimes when we receive cash, we do not have change to pay back. The most important thing to me is change which I do not have usually," added Abdulla.
Others who spoke to Rudaw believe Baghdad will need to play a bigger role to institute such sweeping changes.
The world's largest business software company SAP held a conference in the Iraqi capital with the attendance of Minister of Communication Naim Thajeel al-Rubaie and other government officials on July 4.
A statement from the Iraqi ministry detailed that a "digital transformation" was discussed with the Iraqi Council Ministers, as well as representatives from the German Embassy.
SAP is headquartered in Weinheim, Germany. Neither it nor the embassy had an immediate comment on the project.
"A Visa card is way better. I hope everything becomes electronic as is the case in the west. I hope it will happen here as well," customer Muhanad Abdulsatar told Rudaw about the possible initiative.
Iraq has not held a census in more than 30 years. Its population is estimated around 40 million and rapidly increasingly.
The QiCard was established in Iraq in 2007 and is represented by the country's largest bank, Rafidain. According to its website, 12 banks including Rafidain and Rasheed have issued 7.4 million cards at 450 centers across the country.
Reporting by Mustafa Gorran in Baghdad
