Credit cards major problem in shopping for Iranian tourists

BETÜL ALAKENT
ISTANBUL
Published

The compliance problems existing between Iran and the international financial system compel Iranian tourists to spend cash money for their journey and shopping. Therefore, visitors from Iran have difficulty in spending money, unable to fully unleash their potential. With regards to the compliance problem, tourism professionals expect a solution from the Central Bank of the Republic of Turkey (CBRT). The number of Iranian tourists to Turkey was recorded at 2.5 million in 2017 and this figure is expected to exceed 3 million this year. Yet their vacations are obstructed by the problem of spending with credit cards. Tourism professionals underscored that the compliance issues that Iranian banks have with the Turkish financial system, which is integrated to the global banking system, due to the U.S. sanctions imposed on Iran, negatively affect trade with Iran and tourism sector.

Participating in a tourism fair in the Iranian capital, the Turkish Hoteliers Federation (TÜROB) Chair Timur Bayındır stressed that Turkey receives great interest from Iran. However, he underscored that due to the problems in wiring money between Turkey and Iran, the number of Iranian visitors remain below the potential.

"Iranians are unable to use credit cards in Turkey. They can only spend cash. Because of customs and theft risks, they cannot have large sums of money while travelling to Turkey. So, Iranians are obliged to spend limited money during their vacation in Turkey," Bayındır said. Recalling that Iran and Russia trade in their local currencies, the TÜROB Chair said Turkey may use a debit card system that allows Iranian tourists to deposit Iranian toman and use that debit card while spending in Turkey. He stressed the necessity for Turkish and Iranian banks to work together on the development of this system. In case the problem is solved, Iranian tourists will be able to spend more, Bayındır added.

The Banking Supervision and Regulation Authority (BDDK) announced that the officials of the CBRT and Iranian Central Bank have started working on a system that will solve the problem Iranians have with using credit cards in Turkey.

For international money transfers, Turkish banks are using Society for Worldwide Interbank Financial Telecommunication (SWIFT) just as more than 11,000 financial institutions in more than 200 countries and territories do around the world. Despite the fact that the system is Belgian, the U.S. has access to all the data of financial transactions on SWIFT. Therefore, it is difficult for business people or even tourists to wire money over this international system since Iran is excluded from the global financial ecosystem by the U.S. sanctions.

Evaluating that the recent agreement that will increase the scheduled flights between Turkey and Iran by 40 percent, Bayındır said the capacity increase will be beneficial for coastal cities. "Since direct flights from Iran to coastal areas are now allowed, Iranian visitors will land in Istanbul and then transfer to coastal regions," Bayındır said, recalling that half of Iranian tourists use land transportation and other half prefer charter flights while visiting Turkey. The TÜROB chair also emphasized that the sector expects a 20 percent rise in the number of Iranian visitors while 5 percent of this rise will be facilitated by flight capacity increase.

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