The electronic wallet that in recent months has been introduced as one of the new tools in the country’s payment system is now set to enter the pension and retirees’ claims payment sphere; an issue that, according to the Minister of Cooperatives, Labour and Social Welfare, will be implemented in at least one province from the end of Mehr and is expected, besides facilitating the payment process, to increase pensioners’ purchasing power.
The electronic wallet had earlier been introduced in the country’s payment system under the name “Iran Wallet”; a tool that the Central Bank considers complementary to the existing payment network and whose purpose is said to be diversification of payment instruments, processing micro-transactions and reducing dependence on a specific route in the payment network.
According to the Central Bank’s explanations, Iran Wallet is not intended to replace business wallets, but will operate as one of the complementary components of the country’s payment system. This tool is specifically designed for low-risk, small-value transactions and also enables transferring funds using the recipient’s mobile phone number.
Pensioners in line to use the wallet
In his latest remarks, the Minister of Cooperatives, Labour and Social Welfare announced the entry of the wallet into the pension payment process.
According to Ahmad Meydari: “At the end of Mehr, we will design the wallet at least for one province, and the feature of the wallet is that payments will no longer take several consecutive days and pensioners’ pensions will be paid in one day.”
The Minister of Cooperatives, Labour and Social Welfare also, referring to the experience of using the wallet for other groups, said that the wallet has been created for various social groups and some industries, factories or large companies have used this tool for their employees which, according to him, has increased their purchasing power by at least five percent.
He expressed hope that by creating the wallet for pensioners their purchasing power will also increase by five percent.
Accordingly, what matters in the plan referred to by the Minister of Labour is not merely changing the place of pension deposits; rather the wallet is intended to become a tool to accelerate payments and also to enable the use of supportive capacities alongside regular payments.
How does the wallet work?
When introducing Iran Wallet, the Central Bank stated that this tool was created to simplify some payment transactions; so that the Director General of Payment Systems at the Central Bank had said that a user, to transfer funds via this wallet, only needs the recipient’s mobile phone number and the desired amount, and there is no need to enter information such as card number, Sheba or dynamic password.
At the same time, Iran Wallet is not limited to everyday payments.
The Central Bank had previously stated that part of the salaries, benefits and pensions of payees of executive agencies can also be paid through this tool. Of course, in this process, the approval and consent of the payee or pensioner has been emphasized.
According to the Central Bank’s explanations, if a user receives funds in the wallet they can also transfer their balance to one of their bank accounts; therefore a person’s funds are not intended to remain solely in the wallet and the possibility of transferring them to a bank account has been foreseen.
From employee benefits to pensioners’ pensions
The electronic wallet has found more diverse applications in recent months. In Shahrivar, the directive for paying part of government employees’ benefits via “Iran Wallet” was also announced.
According to this directive, part of the welfare assistance to employees of executive agencies can be deposited into Iran Wallet with their consent. Also, a minimum monthly payment amount of one million tomans has been set for this payment and the payment ceiling is subject to the provisions for implementing annual budget laws. Use of this mechanism is not mandatory and transferring funds to the wallet will be done based on the request and consent of the beneficiary.
In this context, the Central Bank had previously said that, by government emphasis, part of transactions related to salaries, benefits and pensions of payees of executive agencies can be carried out through Iran Wallet. This shows that the wallet is gradually turning from a mere payment tool into a platform for distributing part of supportive and welfare resources as well.
One of the important points in Meydari’s remarks is the connection between the wallet and the timing of pension payments. The Minister of Labour said one of the features of this method is that payments will no longer take several consecutive days and pensioners’ pensions will be paid in one day.
Therefore, in the model envisaged by the Ministry of Cooperatives, Labour and Social Welfare, the wallet is intended, in addition to creating a new route for payment, to provide the possibility of more centralized and faster management of pension payments.
Wallet limits and the possibility of transferring balances
Of course Iran Wallet is designed for small-value transactions and has limitations. According to the Central Bank, the current balance cap of Iran Wallet is 15 million tomans and the limit for each fund transfer transaction is five million tomans; the minimum transaction is also one thousand tomans.
However, these caps do not mean individuals’ received funds are limited to the wallet; because the Central Bank has emphasized that users can transfer their wallet balance to their bank account. Also, regarding the transfer of salaries and pensions, the consent of the payee or pensioner has been stated as a condition for using this route./ ISNA