Strengthening Efficiency, Security, and Transparency: Iraqi Cabinet Issues Regulatory Update for Electronic Payment Services
The Iraqi Cabinet has issued a significant regulatory update aimed at enhancing the efficiency, security, and transparency of the country’s financial sector through electronic payment services. The new regulation was published in the Official Gazette on April 29, 2024, replacing the previous one established in 2014.
Overview of the Regulation
Electronic payment services encompass various activities related to the execution and management of both legal and non-prohibited financial transactions through electronic means. To offer these services, entities must obtain a license from the Central Bank of Iraq and adhere to its standards and regulations.
- Licenses are valid for ten years and subject to renewal upon request and approval.
- The Central Bank holds exclusive authority over the regulation, registration, and licensing of third-party-operated electronic payment systems, as well as their supervision and monitoring.
Requirements for Service Providers
Service providers must:
- Maintain records of all electronic payment transactions and related data for a minimum of five years.
- Provide financial guarantees or easily liquidatable assets for the settlement of financial transactions, in accordance with the Central Bank’s stipulations, to ensure financial stability.
Consequences of Non-Compliance
In the event of non-compliance, the regulation outlines penalties such as:
- Warnings
- Financial penalties
- Suspension or revocation of licenses
The Central Bank is empowered to issue instructions, directives, and guidelines for the implementation and enforcement of the regulation.
Impact on the Financial Sector
Experts believe that the new regulation will have a positive impact on the country’s financial sector, boosting confidence and attracting more foreign investment. Dr. Ahmed Al-Shammari, an economist at Baghdad University, stated: “This regulation will provide a clear framework for electronic payment services in Iraq, which will help to reduce risks and increase transparency.”
Protecting Consumers
The regulation aims to protect consumers by requiring service providers to:
- Maintain accurate records of transactions
- Ensure that financial transactions are settled promptly
Conclusion
The new regulation is a significant step towards strengthening the country’s financial sector and promoting electronic payment services in Iraq. It establishes a comprehensive legal framework aimed at safeguarding consumers and fostering financial system stability.
By implementing this regulation, the Iraqi Cabinet has demonstrated its commitment to enhancing the efficiency, security, and transparency of the country’s financial sector, ultimately benefiting both consumers and service providers.