PROS, CONS, AND CONDITIONS… WHAT IS THE POSSIBILITY OF ESTABLISHING AN INTERNAL PAYMENTS SYSTEM IN IRAQ?
On Thursday, July 3, 2025, international economics professor Nawar Al-Saadi spoke about the possibility of establishing an internal payments system in Iraq, noting that the project’s “success” requires several conditions.
Amid the Popular Mobilization Forces’ salary crisis and the imposition of sanctions on several Iraqi banks, specialists have proposed “establishing an independent Iraqi national payments company,” aiming to “transcend reliance on foreign financial systems such as Visa and MasterCard, which often slow or restrict payment transactions due to factors beyond the state’s control.”
Proponents of the proposal believe that establishing such a platform could “constitute a step toward building an independent digital economy that strengthens the state’s control over its financial institutions, expands the horizons of national financial inclusion, and gradually paves the way for decoupling from foreign exchange instruments that impose their guardianship over our sovereign decisions.”
In this regard, Nawar Al-Saadi told Al-Jabal platform, “The step of establishing an internal payments system in Iraq will bring it closer to international standards in financial system management and enhance the credibility of the banking system with correspondent banks and international financial institutions. The existence of a reliable internal payments system means that Iraq is capable of managing its funds and transactions in a civilized and organized manner, which supports its position in international financial and trade relations. ”
He added, “On the other hand, there are challenges and negatives if the project is not managed with a realistic vision, which are as follows:
First, Iraq’s technological and banking infrastructure remains weak in many areas, and there is a significant digital divide between major cities and rural areas. If this system is imposed without a ready environment, it could create social resistance or disrupt daily transactions.
Second, a large percentage of citizens are still unfamiliar with electronic payments or banking transactions. Therefore, imposing the system without awareness and gradual integration may strengthen the informal market and increase friction between the state and citizens.
Third, the system requires advanced cybersecurity protection, otherwise it will be vulnerable to breaches, especially in a fragile security and economic environment like Iraq’s. Any flaw in cybersecurity could erode citizens’ confidence in the new system and force them back to cash transactions.
The professor of international economics concluded by saying, “Establishing an internal payments system is a step in the right direction, serving the interests of the Iraqi banking system in terms of regulation, trust, and financial inclusion. It also strengthens Iraq’s image globally. However, its success depends on two fundamental factors:
- – Technical and banking infrastructure.
- – The degree of community acceptance of him.
- Both require time, effort and a clear strategy, not just administrative decisions or imported technologies.”
