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Al-monitor — Before the July 2015 nuclear deal, most banking and finance headlines about Iran concerned individuals or banks being fined or coming under investigation for allegedly violating US sanctions. These days, news of banks and financial institutions working with Iran no longer necessarily raise eyebrows. However, an Iranian minister’s recent inference that MasterCard services will become available to Iranians has caused a stir.
AUTHOR: Maysam Bizær
On Aug. 13, several Iranian media outlets quoted Minister of Communication and Information Technology Mahmoud Vaezi as saying that Iran Post Company has signed a deal with a foreign firm to make MasterCard services accessible to Iranians for the first time. “Credit and debit cards, accepted in more than 210 countries where MasterCard is valid, will be distributed at financial branches of Iran Post Company from Aug. 23, which coincides with the beginning of Government Week,” Vaezi said.
The news quickly made headlines around the world — but there have been doubts about its accuracy. MasterCard itself quickly reacted by denying any activity or cooperation with Iran. “MasterCard does not have any activities in Iran, as sanctions have remained in place for US-based companies for some time,” the company’s spokesman Seth Eisen said Aug. 15.
While the reported announcement by the Iranian minister and later denial of cooperation by MasterCard resulted in wide speculation in the Iranian media, Vaezi later tried to clarify what he described as a “misunderstanding” about his remarks.
“What we announced was that the removal of sanctions has started a new phase of international cooperation in various fields of communications, and due to this opportunity, Iran Post Company has signed a deal with an intermediary firm that will offer international credit cards to Iranians,” Vaezi said in another speech on Aug. 21. “At that time, we did not mention MasterCard at all, but some media outlets assumed that the services were going to be provided by MasterCard.”
Based on statements by Iranian officials, it appears that the Malaysia-registered Vision Card Iranian Co. will roll out a debit card service. According to the company’s website, it is the official representative ofTransForex — an official prepaid issuer of MasterCard — in Iran.
Al-Monitor has learned that Vision Card Iranian will issue prepaid debit cards known as “Vision Cards” in cooperation with Iran Post Company. The prepaid and rechargeable debit cards can be credited with up to $50,000.
Hamed Zolfaghari, the managing director of Vision Card Iranian, told the official IRNA news agency that his employer is a private Malaysian firm that is entering Iran’s financial market after the removal of sanctions and after obtaining all the necessary legal licenses from the Iranian authorities.
Despite the sanctions relief under the nuclear deal, major European banks that have deep ties with the US banking system have refrained from resuming cooperation with Iran. There are still some restrictions in place that ban American banks from doing business with Iran, and all dollar-denominated transactions continue to be prohibited for Iran. As such, notwithstanding several attempts by US and European officials to assure European banks about the legality of resuming cooperation with Iran, nearly all major global banks have refrained from dealing with the Islamic Republic.
Nevertheless, many Iranians have needed access to the global financial system both under the sanctions era and at present, and many businesses have emerged to meet this demand.
There have, in fact, been more than a dozen companies that have been providing prepaid Visa and MasterCard debit cards to Iranian customers in past years. These companies enable Iranians to acquire debit cards in their own names or even purchase prepaid debit cards from neighboring countries such as Georgia or the United Arab Emirates, with higher rates and service fees.
Al-Monitor spoke to the managing director of a Tehran-based company who frequently travels abroad. He said on condition of anonymity, “I’m so happy to hear about this service. It is the first time that we can obtain a genuine international debit card that is actually approved by the government. Before we could only get these kinds of services from unreliable companies and there was always the risk of losing your money or being overcharged.”
Despite the hurdles in approaching Western financial institutions, the Central Bank of Iran has reportedly held regular talks with Visa and MasterCard to make their services accessible to Iranians. Iran has also taken measures to allow the use of debit cards issued by Asian banks until restrictions preventing the entry of global electronic payment operators, such Visa and MasterCard, are removed. The Turkish credit card company Iyzico signed a deal with Iran in February to provide its services, while other international companies such as Japan Credit Bureau and China UnionPay have made similar efforts.
Despite Vaezi’s denial that he never named MasterCard and the credit giant’s repudiation of reports that it is operating in Iran, Iran Post Company has begun accepting applications for prepaid debit cards in selected offices in Tehran and will begin registration at 170 of its offices across Iran by late September.
