Payments Snapshot in Iran: Coronavirus (COVID-19) Sector Impact

Payments Snapshot in Iran: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Iran's economy had already been battered by the US sanctions that curb oil and gas exports crucial for government revenues. A slowdown in economic activity caused by the virus outbreak and a sustained closure of its borders are expected to lead to further contraction in its economy, which will affect the payments industry.

In an attempt to address this threat, on March 29, 2020 the Iranian government announced a stimulus package worth IRRR1,000tn ($23.8bn). A sum of IRR750tn ($17.8bn) was allocated to preserve jobs and help businesses that have been affected by the pandemic. It also includes a livelihood package worth IRR80tn ($1.9bn) for vulnerable groups and a IRR50tn ($1.2bn) unemployment insurance fund. As part of the package, the government has earmarked IRR120tn ($2.9bn) for the enhancement of the country’s healthcare system.

This report focuses on the impact of the Coronavirus outbreak on both the economyand the cards and payments industry in Iran. Based on our proprietary datasets, the snapshotprovides a detailed comparison between pre-COVID-19 forecasts andrevised forecasts of total payment card, debit card, and credit and charge card transactions by value and volume. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- The COVID-19 outbreak is expected to have a severe impact on Iran's economy, which is already suffering from high inflation and unemployment. The sharp drop in oil prices due to the price war between Saudi Arabia and Russia will further reduce Iran’s revenues, hampering the overall economy.
- The pandemic is anticipated to boost the use of prepaid cards, and banks are increasingly pushing prepaid cards to consumers as an alternative to cash. On March 18, 2020, Iran Zamin Bank launched a virtual gift card that can be purchased via the bank’s mobile banking app. Banks such as EN Bank and Bank Mellat have raised the maximum charge amount on gift cards from IRR5m ($118.79) to IRR20m ($475.16).
- Iran is emphasizing QR code-based mobile payments to help contain the spread of the virus. The country’s central bank unveiled The National Comprehensive and Integrated Payment Acceptance Plan based on QR codes in March 2020.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Iranian payment industry.
- Understand the key market trends, challenges, and opportunities in the Iranian cards and payments industry.
- Receive a comprehensive insight into payments market in Iran.