For the first time in decades, Iran began issuing credit cards this week.
Several local media sources confirmed that the newly issued cards can only be used domestically and will not have a partnership with any major international credit card company, Bloomberg reported.
Cardholders will be able to make purchases from online Iranian sites, and the cards will have fixed credit limits and fee percentages supported by Iran’s central bank. Credit card limits will range across three tiers, with the highest being 50 million rials (approximately $14,000).
According to the report, the move to credit cards, as opposed to the debit and prepaid cards Iranian banks typically issue, is an effort to help improve Iran’s sanctions-damaged economy.
Earlier this year, Forbes reported that Iran was slated to go live with an offshore bank in its Gulf islands.
Kish Island, where the bank is being set up, has been a tourist attraction for years. The placement there will let firms capture cross-border knowledge and payments. The impetus is to ride the wave of cross-border payments. The activities will extend across money tied to both foreign and domestic entities.
The banking industry in Iran continues to recover from the impact of punitive sanctions. The need for recapitalization is one that comes even as banks of all stripes and sizes have been hard-pressed to find counterparties for risk management.
As sanctions lifted, there were nearly two dozen projects worth a total of $3.5 billion in the first quarter of this year.