US start-up Paymentwall abandons Iran project
San Francisco-based payments company PaymentWall has "postponed indefinitely" the integration of its platform with Iranian system Shetab which went live in April 2016. Honor Gunday, head of business development at Paymentwall, said the firm had been contacted by lobby groups "pressuring us to not do business in Iran", prompting the company bosses to have a change of heart. PaymentWall has called on the Office of Foreign Asset Controls of the Treasury Department to support its business facilitating payments to and from Iran, but has yet to receive a reply.

Last April, Bank Innovation reported that Paymentwall, a San Francisco-based payments company, had enabled payments to one of the world’s most closed markets, Iran. This news came shortly after the announcement of the deal between the United States, European Union and Iran for Iran’s pledge to cease work on its nuclear weapons program.

Specifically, Paymentwall announced on April 12 that it had integrated its payments platform with the Shetab, Iran’s “unified, electronic clearance system for the entire Iranian banking operations that allows it to facilitate transactions from credit cards, ATMs and point-of-sale (POS) terminals.” But U.S. Treasury Secretary Jacob Lew noted at the time that, though the nuclear sanctions were lifted, “the U.S. financial system is not open to Iran and that is not something that is going to change.”

What has happened to the Paymentwall Iran program since then?

The short of it is, Paymentwall has abandoned the program. A company official told Bank Innovation that rather than “lose our entire company just to get access to Iran,” Paymentwall has “postponed indefinitely” its Iran payments venture.

Honor Gunday, who heads business development at Paymentwall, explained why in a note to Bank Innovation yesterday:

The rule was if a non-U.S. entity wants to engage with Iran they could. So a foreign subsidiary of an American entity could engage with Iran to facilitate financial transactions. But after the article went live, we received many messages from lobby groups pressuring us to not do business in Iran so we reconsidered and realized the benefits didn’t outweigh the revenue potential. Basically we could lose our entire company just to get access to Iran. Which didn’t make sense so we decided to postpone it.

Gunday and Paymentwall see the potential for an Iran payments program in the future, however. Gunday said President-elect Donald Trump might be a help.

Trump seems like an opportunistic president maybe he will enable trade with Iran and Iranians can gain access to Western digital content. There is a provision that allows American companies to do business in Iran to educate them about Western culture, but due to the fact that we would facilitate this via financial means (by allowing people to unlock by paying using Iranian Shetab) makes it a grey area at this point.

Paymentwall has appealed to the the Office of Foreign Asset Controls, part of the Treasury Department, to allow it to facilitate payments to and from Iran. Paymentwall has not gotten a response from OFAC, which has led to the program postponement.

Gundar insists, however, that there is a compelling business opportunity to facilitate Iran payments:

We received a lot of love messages and met a lot of inspired startup people from Iran via signups for our service so there is demand there for sure — and we hope that one day, the global markets will allow Iran to have equal access to global digital content, games and music etc.

Given Trump’s language about the Iran deal, Gunday’s stance may seem unduly optimistic. Not everything that technology can enable will actually happen, after all.