EXPERTS: THE NATIONAL PAYMENT CARD ENHANCES MONETARY SOVEREIGNTY
Economic experts have welcomed the Central Bank’s initiative to issue national electronic payment cards, stressing that the government’s move has numerous benefits, most notably its contribution to absorbing liquidity and eliminating financial hoarding, as well as strengthening the principle of monetary sovereignty.
The Central Bank of Iraq recently announced that the national electronic payment card project it launched is a local option and exclusively in dinars. The Central Bank emphasized that the project does not cancel or restrict existing international cards such as Visa and Mastercard, explaining that the project aims to enhance financial inclusion and diversify options for citizens.
monetary sovereignty
The Prime Minister’s Financial Advisor, Dr. Mazhar Mohammed Salih, told Al-Sabah: “Issuing the national payment card is a principle implemented in all countries around the world. It allows its holder to make payments using electronic cards within the country in Iraqi dinars, under the supervision of the monetary authority and under the principle of monetary sovereignty, without the need to go through external oversight systems.”
He added, “The project is called the Local Scheme, and it aims to reduce the use of cash in Iraqi dinars as a matter of flows within the national economy only. Issuing a unified electronic payment card is one of the ways to achieve financial inclusion within our country’s monetary system. Payment cards that can be used outside the country in foreign currencies such as dollars and others through Visa and MasterCard will remain in effect through international companies.”
LOCALLY BORN
Economic expert Ghazi Al-Kanani described the Central Bank’s new move to issue a local electronic payment card as “locally born” and enhancing competitiveness in providing services to the largest segment of citizens.
Al-Kanani added, in an interview with Al-Sabah, that “this trend presents citizens with a number of options, and they must choose the most appropriate one that aligns with their desires and needs, which have begun to multiply and interact with the financial technology witnessed in the world around us. At the same time, we must follow and keep pace with it.”
He pointed out that “the reality of electronic payments must witness continuous development in all its aspects and be integrated with the global electronic payments system witnessed by the international financial sector.”
Al-Kanani pointed out that “local companies are working to adopt more secure and advanced systems, which will enhance products. The best financial services must be available within the Iraqi labor market. The Central Bank’s move merely enhances the reality of electronic payments, not limits their development.” He noted that “local electronic payment cards now provide secure services worldwide.”
ADVANCED SERVICES
Nabil Al-Najjar, an expert in electronic payments, told Al-Sabah that the Central Bank of Iraq’s launch of the national electronic payment card project is an “important and necessary option,” given that the card is designed to provide a safe and practical means of payment and is managed entirely locally, without relying on international networks like Visa and Mastercard.
He stated, “The goal of this project is to reduce reliance on foreign cards and lower fees and commissions imposed by global companies. It also contributes to strengthening digital sovereignty and enabling financial institutions to provide flexible and advanced payment services within the country.”
Al-Najjar noted that “the new card operates using the globally used EMV technology and can be used for withdrawals and payments within Iraq via ATMs and points of sale, while ensuring that all data and transactions remain within national borders, enhancing security and providing a more independent financial environment.”
FINANCIAL INCLUSION
With this project, Iraq joins international initiatives that have achieved success, such as Mada in Saudi Arabia, Meeza in Egypt, and Mir in Russia. The system is being gradually developed to meet the needs of individuals and institutions.
Banking expert Dr. Nabil Rahim Al-Abadi told Al-Sabah that the system used by the project, known as “Domestic Switch,” aims to enhance financial sovereignty and reduce reliance on external systems. The Central Bank of Iraq seeks to build a central system linking banks and financial institutions within Iraq.
He pointed out that “the project focuses on enhancing financial inclusion, as the rate of card usage in Iraq is low compared to neighboring countries.” He said, “According to the Central Bank of Iraq’s announcement, the project aims to establish a national electronic payment company to unify local payment systems and facilitate interoperability. The expansion of the digital infrastructure includes increasing points of sale and ATMs, in addition to developing platforms such as the Sweej application and supporting licensed digital banks.”
Al-Abadi emphasized that “the project is expected to contribute to reducing transaction costs, as high fees on international transfers will be reduced, further enhancing card usage and contributing to the growth of the digital economy.” However, the expert pointed out a number of challenges the project will face, most notably prevailing cash habits and cybersecurity risks, which require enhanced data protection.
He explained that “the Central Bank of Iraq’s move to establish this system represents a turning point in building an independent national payment system that enhances financial sovereignty and reduces reliance on cash, forming the basis for a more resilient economy.” He considered the project a major achievement in the history of the Central Bank of Iraq, emphasizing its role in supporting structural reform and transparency, “which paves the way for a sustainable financial future in Iraq.”
NATIONAL SYSTEM
Financial affairs expert Dr. Mustafa Akram Hantoush emphasized that the project represents a positive development in enhancing digital sovereignty and regulating the payments sector. He pointed to the Central Bank of Iraq’s statement announcing the launch of the “National Card Planning System,” a fundamental pillar toward developing an integrated national system for managing local payment cards.
Hantoush pointed out that “this step confirms that Iraq has a specialized internal system for issuing and operating local cards, away from complete reliance on external systems,” noting that “the two international companies, MasterCard and Visa, continue to operate inside Iraq, despite the circulation of inaccurate information about their services being limited to banks linked to accounts with Citibank or JPMorgan.”
Hantoush confirmed that “electronic payment companies operating in Iraq will continue to operate within the framework of the system without any direct impact, as the new service is a regulatory measure and not a replacement for any of the companies or cards operating in Iraq.”