ZainCash CEO: Iraq is 5 years behind the region in digital payments

Although the adoption of digital payment systems in Iraq has gained significant momentum in recent years, the country's deep-rooted reliance on cash remains one of the biggest obstacles to this process. Yazen Altimimi, CEO of the Iraqi financial technology company ZainCash, states that the country needs at least five years to catch up with its regional competitors in its digital payment infrastructure. In his statements from Baghdad, Altimimi emphasized that they are moving in the right direction, yet with a realistic perspective, he noted that Iraq still has a long way to go to reach the regional level in terms of digitizing its payment systems. ZainCash stands out as an independent company established after the Central Bank began distributing mobile wallet licenses over a decade ago to increase financial inclusion. Majority-owned by the Kuwaiti telecommunications giant Zain Group, this platform serves as a crucial building block of Iraq's digital finance ecosystem.

ZainCash reinforces its leadership in the sector by facilitating the daily financial transactions of the Iraqi people through its wide range of services. Offering its users peer-to-peer money transfers, cash deposit and withdrawal operations across 10,000 agents nationwide, and international remittances via Western Union, the application also provides a prepaid Mastercard usable both domestically and internationally. According to central bank data, ZainCash is responsible for approximately 95% of all mobile payments across the country. This overwhelming market share demonstrates the company's immense effectiveness in reaching millions of users in both urban and rural areas. Altimimi adds that thanks to the innovative solutions they offer, public confidence in digital financial tools is gradually increasing, laying a solid foundation for future growth.

Iraq's financial sector has historically been shaped largely by the dominance of state-owned banks such as Rafidain and Rasheed. However, comprehensive reforms are currently on the agenda today, accompanied by international consulting firms, to restructure or consolidate these traditional banks. Another significant factor driving growth in the digital payment space is the country's dynamic and rapidly expanding youth population; according to recent censuses, approximately 60% of the Iraqi population, which has reached 45 million, is under the age of 25. This dense youth demographic is enabling the rapid proliferation of both regional and local applications such as Careem, Talabat, and Toters, which operate in sectors like e-commerce, food delivery, and ride-hailing. Altimimi emphasizes that the accelerating rate of new small enterprises entering the market also reflects growing confidence in the sector and highlights that the digital ecosystem is diversifying further every day.

While the total value of digital payments in Iraq is rapidly increasing and expected to have exceeded 26 billion dollars last year, the annual growth rate between 2025 and 2029 is projected to hover around 24%. Although these figures prove that the country holds massive potential in financial technologies, the barriers facing the system have not yet been fully overcome. Transaction fees in the country remain at very low levels compared to global standards, thereby limiting the profit margins and, consequently, the growth potential of fintech companies. Altimimi notes that the general public still relies on the cash they have on hand or at home, expressing that it will take time for customers to experience the convenience of digital payments firsthand and adapt to them. In the current landscape, persuading customers to adopt these new systems necessitates long-term educational and incentive strategies to earn user trust.

The structural challenges facing the sector are not limited to consumer habits; operational barriers such as the talent gap and strict regulations also pose significant hurdles for companies. Iraqi financial technology firms face immense difficulties in finding and retaining qualified personnel, and this limited talent pool incurs exceptionally high costs. Additionally, extremely stringent regulations regarding data security and privacy increase companies' compliance costs, thereby hindering innovation. On another note, international sanctions, such as the US banning certain Iraqi financial institutions from the dollar system over alleged money transfers to Iran, serve as an external factor pressuring the sector. Despite all these challenges, the immense interest drawn in recent months by new and practical services, such as paying electricity bills via mobile applications, indicates that the future of digital payments in Iraq is taking shape slowly but steadily.