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January 25, 2010updated 04 Apr 2017 4:17pm

Net1 takes Iraq into the electronic payments age

Building a retail electronic payments system from scratch is no easy task, even more so when it is in Iraq, a country still recovering from the ravages of war It was a challenge Net1 UEPS Technologies took on in February 2008. The US company was appointed by Iraqs government to provide a solution for state payments, including grants to war victims and pensions and salaries for employees of the two state banks.

By EPI editorial

Building a retail electronic payments system from scratch is no easy task, even more so when it is in Iraq, a country still recovering from the ravages of war. It was a challenge Net1 UEPS Technologies took on in February 2008.

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The US company was appointed by Iraq’s government to provide a solution for state payments, including grants to war victims and pensions and salaries for employees of the two state banks.

Launched in August 2008, Net1’s smart card-based solution has made remarkable progress, with the millionth card issued at the end of 2009. Simultaneously, Net1 announced it had received an order for an additional 800,000 smartcards and 1,500 POS merchant store devices, in a step towards creating a national payment system.

Net1 founder, chairman and CEO Serge Belamant said: “We are in the early stages of creating a broad-based electronic transaction processing platform. This will allow the citizens of Iraq to receive benefits in a secure, cost-efficient manner and also create broader access to additional, formal financial services.”

At the heart of Net1’s solution is its Universal Electronic Payment System (UEPS), which Belamant developed and patented in 1989. It was, effectively, the world’s first electronic purse.

UEPS uses smartcards that operate in real-time but offline, unlike traditional payment systems that require immediate access through a communications network to a centralised computer.

This offline capability means that users of Net1’s system can enter into transactions at any time with other cardholders in even the most remote areas provided a portable offline smart card reader is available.

Developing market credentials

UEPS found its first application in the distribution of government welfare grants and pensions payments in South Africa, where the company was originally domiciled and still retains a major technology development presence.

The UEPS solution has enjoyed significant success, and now boasts 3.8 million cardholders in South Africa as well as deployments in some 19 other developing countries.

Outside South Africa, Net1’s first major breakthrough came in 2001 when it was contracted by the Reserve Bank of Malawi to implement Malswitch, a national ATM and POS switching and smartcard payment system on the UEPS platform.

Among Net1’s recent successes was its deployment in 2008 of e-zwich, a national smart card settlement and switching system in Ghana. E-zwich is now the de facto payment standard and provides inter-operability with, and to, all the other payment systems, such as Visa and MasterCard.

In Russia, Net1 has deployed over 7 million UEPS cards to customers of Sberbank, the country’s largest bank. Called Duet, the UEPS system is also present in many former Soviet Union republics.

Net1’s technological credentials were clearly a major selling point in Iraq, a country in which fewer than 1 million people out of a total population of 24 million have a bank account.

The American Forces Press Service reported in January that the ATM has finally arrived in the country with the installation of 20 machines in the capital, Baghdad, a city with 7 million inhabitants.

The US Army has put its weight behind the development of electronic funds transfers, which it estimates will save US taxpayers $20 million a year by reducing the heavy dependence on cash to pay local contractors.

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Prepare for changes in the Payments market

 The Payments market has seen drastic changes in the past few years, with this only expected to continue. What does your company need to do to prepare for what’s to come? GlobalData’s Payment Trends for 2022 report explores the key trends in technology, consumer habits, and regulations shaping the market. We also identify the leading companies in this changing market, giving you a competitive market outlook. This report covers the impact of:
  • ESG
  • E-commerce
  • Mobile payments
  • Alternative payment rails (Real-Time Payments, Blockchain, BNPL)
  • Fraud & Cybersecurity
  • Regulations
Download the report now to learn essential strategies to maximize your growth in the face of rapid change.
by GlobalData
Enter your details here to receive your free Report.

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