Ever wondered how the state of online payment and transactions in Iran is doing in country with almost 80 million of population and 92% of debit card penetration?! That is a question that has been asked by many as Iran’s payment landscape has proven to be one of the hottest.

Facts and figures

According to data collected by ECM, as of now only 3% of all transactions are online and 6% in terms of value amount that is transacted yearly. The growth of this number through the years is somewhat interesting. There has been 25% of growth in total number of transactions compared to 2014 . What is clear at the moment is that Iran is at in a infant stage when it comes to online transactions. However the strong local banking system and the high amount of debit card access (92%) have provided the basis for growth. The current online payment and transaction at this stage indicates a great opportunity for banks, fintech startups and financial institutes to take advantage of this market and invest on fintech and online payment solutions.

The average online monthly transactions has grown up to 25% from 2014 to 2015 and in terms transaction value, there has been 15% growth comparing to last year. Though the share of online transactions comparing to total transactions are pretty small, the growth rate is still the highest in the region. There are currently 15 thousand online portals and 4 million POS terminals which takes 97% of all total transactions within the country. Yet the average amount per transaction is much higher in online transactions than in other transactions done through POS terminals, ATMs and more.


Comparing Iran, Turkey and Egypt

We compared countries in the region with similar sized economies and population. Egypt (82 Million), Turkey (75 Million) and Iran (78 Million) are the 3 countries with the most similarities in many economical aspects. Looking at debit card penetration, Iran leads at 92%, Turkey with 43% and Egypt at only 18%.  However Egypt tops Iran in terms of total amount transaction value with payment cards (debit and credit cards) valued at $23.5 billion comparing to $20.5 billion (Transactions on bill and telecoms are not included) of annual transactions in Iran. Iran currently has 231 Million active debit cards which is almost twice as much as Turkey’s. Turkey has technological superiority in mobile payment systems comparing the 2 countries and many fintech startups in payment are flourishing. Out of the three, Iran has the highest annual growth in number of online transactions in the past 2 years.

Transaction methods

Debit card in Iran is the key source for almost every day to day transactions. Because of the sanctions and the absence of credit cards, debit cards are the only payment cards in Iranian hands. SMS banking became one of the most relevant methods of transaction, when it comes to paying monthly bills, cross account money transferring and buying sim credits. USSD codes boomed before it got legally band because of lack of security by CBI (Central bank of Iran). USSD codes introduced by the banks provided instant transactions and money transferring to any account. Mobile apps provided by the banks also used this technology for money transferring before it was switched to online portals. Tosan’s Shaparak payment portals is still the most used online payment portal used by banks and companies for B2C payment.

Payment startups

The two corporate fintech giants Fanap (the financial technology arm of Pasargad bank) and Tosan are the main rivals when it comes to core banking and financial technologies. Now more payment startups are showing up to get some piece of the pie from this high potential market. Paypal clone Zarinpal is one of the most well known fintech startups in payment that has been operating in the past years. There are also startups that are grinding on world trends like the recently launched C2C payment platform Payping, which is the first of its kind in Iran. The list goes on as more fintech startups are focusing on payment and building more trendy products in areas such as mobile payment and other diverse areas. We have our eyes on the flourishing fintech startup to screen the next generation of products and services in payment. 

Iran's online payment and transactions infograohic

Though the facts that Iran is at a very early stage in adopting online payment, the annual and monthly growth shows an interesting horizon on where it’s heading. Leave us a comment on what kind of startups you think can revolutionize Iran’s payment industry, and stay tuned for the full report on Iran’s payment landscape by the TechRasa research team.