For Advancing Digital Payments within the Nation, Mastercard goes into a strategic partnership along with the Central Bank of Iraq

In a bid for providing a huge boost up for a robust financial inclusion, encouragement of Socio-economic progression, curbing the risks of a shadowed economy as well as fast-tracking advancement via a cashless society, the Mastercard-Payments major, has signed up partnership agreement alongside the Central Bank of Iraq (CBI) thereby digitizing nation’s payment ecosystem.

This partnership is currently aimed in for creation of an efficient, reliable, as well as secured payment ecosystem commencing with the education industry and then progressing, into other industries. This will not only curb the utilization of cash, endorse the utilization of digital payments, and increase government revenues, but will also minimize sizeable operational and organizational inadequacies in the education industry by plummeting the overly manual processes.

Director General for Payments Department at the Central Bank of Iraq Ms. Duha Abdul Kareem Mohammed stated out that: ““The work that Mastercard has done in Iraq over the last few years has made a notable impact on the country’s financial service’s sector and driven greater levels of financial inclusion. At the Central Bank of Iraq, we clearly recognize that the digital economy has a vital role to play in that journey, especially in enabling formal economic growth through a new payment ecosystem that is transparent, simple, and effective. We are very much looking forward to working with Mastercard to advance Iraq’s digital transformation, beginning with the education sector.”

Division President MENA, Mastercard, Khalid Elgibali, stated out that: “Creating a digital payment ecosystem is critical, not only because it encourages economic development, but because there is also a demonstrable, negative relationship between cash use and the shadow economy. Our work with the Central Bank of Iraq will focus on improving overall efficiencies the economy, starting with the educational institutions by giving parents, students, and merchants a much safer, simpler, and more convenient way to pay. 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.”

A huge part of Iraqi Population, comprising of a 40 million individuals is largely cash-powered with 99.8 percent of their overall $122 Billion individual consumption expenditure made within cash during 2019.1

Despite that however, there is an enormous potential for digitization, as the nation has a 70 percent smartphone penetration rate and 22 percent2 of the population comes within the young and tech savvy 15-24 years old age bracket3.

Furthermore, there is often very little choice in payment methods offered to parents and custodians with most students handling all their payments in cash. With neither parents nor students having bank accounts or utilizing online payment services, it is grave to inspire a variation in the way clients pay school fees, since it can be the basis of a ripple effect by touching the entire payment ecosystem and economy.

The Mastercard’s partnership with CBI is a preliminary point that will permit for the progress of a full digital ecosystem in Iraq, which will cover crucial pillars including the utilization of Public Policy and Regulation to restrict the shadow economy, a wholesale modernization of the payment ecosystem, and the digitization of core value chains. Those include government collections as well as disbursement and peer-to-peer and consumer expenditure, as well as business procurements and salary payments.

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