Iran reports boom in electronic check use
Iran has reported a sharp surge in the use of electronic checks during the calendar year that began in late March, as part of efforts to reduce check bouncing and boost confidence in the country’s banking system.
The head of the Central Bank of Iran’s (CBI) Payment Systems and Modern Technologies Department said on Sunday that bank customers have issued around four million electronic checks since March, marking an increase of more than 500% compared with the same period last year.
Nooshafarin Momen said that only about one percent of those electronic checks have bounced. She added that the number of state-owned and private banks processing electronic checks has doubled from the previous calendar year, with roughly 80 percent of banks now issuing such checks to customers.
Momen said the CBI has been tasked with fully discontinuing the use of paper checks by the end of a five-year economic vision plan that concludes in 2029.
She noted, however, that electronic checks currently account for only about two percent of all checks issued and processed within Iran’s banking system.
Electronic checks, or e-checks, function similarly to traditional paper checks but offer faster processing times and enhanced security features.
Iran has already tightened regulations governing the use of traditional checks, resulting in a significant decline in the number of bounced checks in recent years.
CBI figures released in 2022 showed that the number of people jailed for issuing bounced checks had fallen by more than 80% over the previous five years, following the introduction of a law that restricts the use of bank checks to individuals with acceptable credit ratings.
Iran launched e-check services three years ago in the hope of facilitating trade and business transactions across the country.
Post-dated checks are commonly used by Iranian individuals and businesses as guarantees for a wide range of purposes, including rentals, purchases, and transactions conducted in the country’s traditional bazaars.
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