The Central Bank of Iran is allowing local financial institutions to issue credit cards for the first time in the Islamic Republic’s history, reports the Iranian Students’ News Agency (ISNA).
The full introduction of the cards could take some time as local banks will need to get used to the credit card system, according to the head of Iran’s central bank Valiollah Seif.
“It would be wrong to think that these cards will be quickly adopted by the banking network,” the news agency quotes Seif.
The step reportedly aims to encourage public spending. The cards will be offered with three set credit limits topping off at $15,000. They will be able to be used for purchasing goods and services over the counter and online. Accounts not paid within a month will be subject to an 18 percent annual interest rate charge.
Bank Melli Iran and Ayandeh Bank have reportedly started issuing. The number of the credit cards to be released will depend on applications received by the banks.
While credit cards are a new experience for Iran, the republic’s population of 80 million is familiar with debit and prepaid cards. According to Turkish payments processor Iyzico, the country has 231 million active cards operating through the Shetab debit card system.
Iran’s financial institutions are trying to adjust after decades of sanctions against the country were lifted at the beginning of the year.