An Istanbul-based payments startup said on Tuesday that it signed a deal that smooths the way for companies seeking to follow it into Iran’s dlrs 400 billion economy.
Iyzico’s agreement with Tehran-based electronic payments platform PECCO lets its customers process transactions from some 230 million payment cards that until recently weren’t connected to any financial system outside Iran, according to Barbaros Ozbugutu, Iyzico’s German-Turkish chief executive. The deal is the first of its kind, he said in an interview in Istanbul.
Since visiting Tehran last year, the founders of the World Bank-backed company have been working on expanding in Iran, Ozbugutu said. That gives them a foothold in a country that’s been so far untapped by U.S.-based competitors Paypal Holdings Inc. and Stripe Inc.
‘We’re fulfilling the role Paypal was providing in places like Germany, where they were the preferred provider during that country’s digitalization phase,’ Ozbugutu said of Iyzico’s home market. It made sense to expand to Iran because there are ‘two major markets in the region with high card penetration, and they’re Iran and Turkey. Both have populations of 80 million, a very young population and quite high Internet penetration.’
Iyzico signed the deal to enter Iran after restrictions excluding the country from the SWIFT banking system began to be dismantled as part of an agreement over its nuclear program. In Iran, all banks are integrated into one unitary clearance system, called Shetab, which means Iyzico’s clients can sell to any card holder in the nation without establishing relationships with individual Iranian banks, Ozbugutu said.
Iyzico last year raised $6.2 million in a round led by the International Finance Corporation, or IFC, the investing arm of the World Bank. Its customers in Turkey include BMW, Allianz and online marketplace Sahibinden.com.