Mastercard has inked a partnership agreement with the Central Bank of Iraq to digitize payments in that country.
The aim is to make this largely cash-driven society a more cashless place, while also hoping to “boost financial inclusion, encourage socio-economic development” and “mitigate the risks of a shadow economy,” Trade Arabia reported Monday (April 19).
The partnership will start with Iraq’s education sector before moving to other sectors, hoping to reduce cash use and promote digital payments and boost government revenues, while also reducing operational/administrative inefficiency by making the process less manual.
“Our work with the Central Bank of Iraq will focus on improving overall efficiencies in the economy, starting with the educational institutions by giving parents, students, and merchants a much safer, simpler, and more convenient way to pay,” said Mastercard Division President MENA Khalid Elgibali. “This is only the start however, and we look forward to expanding into other sectors at a later stage, as we work to advance the full payment ecosystem and achieve financial inclusion in Iraq.”
According to Trade Arabia, Iraq’s 40 million people make most of their payments in cash, to the point that 99.8 percent of the $122 billion in personal expenditures made in 2019 were made with cash. Still, the news outlet says there is a large potential for digitization thanks to a 70 percent smartphone adoption rate.
“Furthermore, there is often very little choice in payment methods offered to parents and guardians with most students managing all their payments in cash,” Trade Arabia writes. “With neither parents nor students having bank accounts or using online payment services, it is critical to encourage a change in the way consumers pay school fees, since it can cause a ripple effect by impacting the entire payment ecosystem and economy.”
Also Monday, Mastercard announced plans to purchase identity verification firm Ekata for $850 million.