Mastercard, a US-based financial services company, recently entered a partnership with the Central Bank of Iraq to expand Iraq’s digital finance ecosystem with the aims of furthering financial inclusion, moving toward a cashless society and promoting socio-economic development in general. The effort will begin by digitizing tuition payments before expanding to address consumer spending, government collections and salary payments. Among the reasons to promote digital payments are to decrease the administrative costs that schools and other businesses incur handling cash as well as to increase government revenue by reducing tax evasion.
Khalid Elgibali, Mastercard’s Division President for the Middle East and Northern Africa, said, “creating a digital payment ecosystem is critical, not only because it encourages economic development, but because there is also a demonstrable… relationship between cash use and the shadow economy. Our work with the Central Bank of Iraq will focus on improving overall efficiencies in the economy, starting with the educational institutions by giving parents, students and merchants a much safer, simpler and more convenient way to pay.”
Headquartered in the US state of New York, Mastercard is a payments and technology company connecting consumers, financial institutions, merchants and governments in approximately 210 countries and territories. As of October 2020, Mastercard reported net quarterly income of USD 1.5 billion on total assets of USD 32 billion.
Founded in 1974, the Central Bank of Iraq is responsible for maintaining inflation stability, regulating private banks, and managing the Iraqi dinar and state reserves. In December 2018, the bank reported total assets of IQD 99 trillion (USD 67 billion).
By Sophie Fiala, Research Associate
Sources and Additional Resources
Mastercard press release
https://newsroom.mastercard.com/mea/press-releases/mastercard-enters-into-strategic-partnership-with-central-bank-of-iraq-to-advance-digital-payments-in-the-country/
Central Bank of Iraq homepage
https://cbiraq.org/
Central Bank of Iraq financial statements, December 2018
https://cbi.iq/static/uploads/up/file-156040805868532.pdf
Mastercard financial statement, December 2020
https://s25.q4cdn.com/479285134/files/doc_financials/2020/q4/4Q20-Earnings-Release.pdf
Previous MicroCapital article on Mastercard
https://www.microcapital.org/microcapital-brief-mastercard-buying-3-8-equity-stake-in-mobile-money-unit-of-airtel-africa-for-100m/
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