AFTER 19 DAYS, A FINANCIAL SHIFT DIRECTLY AFFECTS IRAQIS’ POCKETS.

 AFTER 19 DAYS, A FINANCIAL SHIFT DIRECTLY AFFECTS IRAQIS’ POCKETS.

 Nineteen days separate Iraq from implementing a ban on cash payments in government institutions and adopting all government payments electronically. This is a “strategic” step to improve governance, reduce corruption, promote economic growth, and promote a cultural shift toward transparency and modernity, according to the Prime Minister’s advisor for financial affairs, Mazhar Mohammed Salih.

However, this shift comes at a time when economic experts believe that awareness of the importance of electronic payments remains limited, particularly in rural areas and among the elderly. There is a significant gap between urban and rural areas, where infrastructure and awareness are weak, and where there are few outlets for effective coverage.

The Iraqi government has decided to ban cash payments at government institutions starting next July, and to adopt all government payments electronically. To this end, it has launched awareness campaigns to encourage the adoption of electronic payment systems and move away from the traditional cash-based culture.

Limited development

Economic expert Ahmed Abdel Rabbo asserts that “there has been a significant improvement in awareness, but it remains limited. Electronic payment card ownership has reached 45% of adults (approximately 20 million cards), with bank accounts growing. There is also a significant gap between urban areas (such as Baghdad) and rural areas, where infrastructure and awareness are weak.”

Speaking to Shafaq News Agency, Abdul Rabbo pointed out the “need to encourage citizens to prefer electronic payments to avoid the risk of theft or damage to cash, especially with 95 trillion Iraqi dinars hoarded outside banks.” In addition, Abdel Rabbo stresses the importance of “expanding the number of retail outlets, as they do not exceed 50,000 devices, while the country needs 800,000 devices for effective coverage.”

Based on the above, Abdel Rabbo calls on the Central Bank to launch a campaign to enable vulnerable groups (such as rural residents) to access banking services, increase the percentage of account holders, and develop infrastructure such as internet networks and POS devices .

The importance of electronic payment

Economist Munir al-Abidi agrees with Ahmed Abd Rabbuh, stating that “Iraqis’ awareness of the importance of electronic payments is still developing, gradually increasing with the introduction of smart card payments and the proliferation of banking applications, particularly among youth and urban residents.”

However, Al-Abidi added to Shafaq News Agency, “Awareness of the importance of electronic payments remains limited in rural areas and among the elderly, due to weak trust in the banking system, a lack of financial literacy, and fear of electronic fraud.”

Regarding the most important factors influencing the adoption of electronic payment, Al-Abidi summarizes them as “the availability of infrastructure (internet, points of sale), trust in banks and service providers, financial awareness and digital education, government incentives (such as subsidies, discounts, and partial obligation), and the acceptance of these methods by merchants and small businesses.”

Great benefits

Al-Abidi asserts that “expanding the use of electronic payment systems brings significant benefits to both the state and its citizens. For the state, it contributes to reducing cash transactions, which reduces tax evasion and increases financial transparency. It also enhances the efficiency of government spending management and facilitates oversight of financial flows.”

For citizens, “electronic payment provides ease and security in conducting transactions, grants them faster access to salaries and services, reduces the risk of theft and carrying cash, and enables them to access the financial system and benefit from loan, savings, and insurance services,” according to Al-Abidi.

For his part, the Prime Minister’s Advisor for Financial Affairs, Mazhar Mohammed Saleh, said, “The steps the country is taking to adopt electronic payments are consistent with the e-governance mandated by the government program in terms of speed, accuracy, quality, and timing.”

Saleh explained to Shafaq News Agency, “The importance of electronic payment in state institutions is specifically summarized in its economic, administrative, and cultural aspects. It is a strategic tool for improving governance, reducing corruption, and promoting economic growth and cultural transformation towards transparency and modernity.”

In this regard, “it can enhance the strength of the unified treasury account system in terms of the speed of financial collection and the unity of flows in cash budget accounts with high-level governance without fragmentation or slowdown,” according to Saleh.

Electronic collection

He explained, “Government e-collection strengthens collection activities by controlling the flow of cash resources (such as fees, taxes, and wages), which reduces waste and increases state resources, thus better narrowing the gap between revenues and public expenditures, especially for non-oil revenues.”

Another benefit of electronic payments, Saleh continued, is that “electronic payments reduce cash manipulation and informal collection, and make money movements highly traceable and auditable, as all electronic transfer transactions are subject to a central digital system, allowing for easy auditing and review.”

He added, “At the same time, electronic payment helps citizens quickly settle payment obligations, particularly those related to services (such as paying electricity bills, passports, various fees, and taxes) easily over the phone or the internet, without having to stand in long, time-consuming queues.”

He adds, “It’s no secret that the culture of electronic payments helps integrate citizens into the digital environment and reduces fear or skepticism about digital transactions. This culture is closer to implementing the ‘financial inclusion’ strategy than providing banking services to the most vulnerable segments of society and gradually integrating them into the country’s banking system. This encourages savings, financial planning, and spending control.”

Saleh concluded his remarks by saying, “Electronic payment is not just a technical tool; it is part of the vision to modernize the Iraqi state administratively, economically, and culturally. Its widespread adoption is a crucial step toward a transparent digital economy, improving government performance and bringing services closer to citizens in the age of the digital economy.”

(Mnt Goat: This is the final warning for the citizens of Iraq to open a bank account and get their debit card. They are trying to sell the idea now again to those that do not trust the banks. In the western society we have had these automatic bank deposit ability and debit cards for almost four decades.)