Dear reader,
I'm excited to present our second RO Long Read series.
Our first one was an exploration into the links between Japanese capital and the African startup scene, written by RO Correspondent James Mahon. Part I is out here, Part II is out here, and Part III will be published in the coming weeks.
This second RO Long Read series is a deep-dive into the Iraqi fintech sector.
This series was written by RO Correspondent Rabel Kaka. Based in Iraq, Rabel is a senior research associate at MAGNiTT and has become a fine connoisseur of the Iraqi fintech scene. He's spent the past few months interviewing Iraqi fintech startups, Iraqi VCs, and other relevant parties to paint a picture of where Iraqi fintech stands today.
Some of the topics Rabel uncovered include:
- The dichotomy between digital commerce and digital transactions (the former doesn't automatically lead to the latter).
- The benefits of digitizing and formalizing the Iraqi economy, and why it has become a governmental priority.
- The Iraqi government's efforts to push digital payments in the public sector.
- The hesitations Iraqi consumers and businesses have vis-a-vis digital payments, and how founders are building with those hesitations in mind.
- The current Iraqi "payment stack".
- Why fintech Iraq is bank-dependent, not bank-disruptive.
- The notable, encouraging evolutions in the Iraqi regulator's posture.
This RO Long Read series comes in at 8,000+ words. We've broken up into two parts.
Part I is what we're publishing today. Part II is ready and will be published next week.
Please enjoy.
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Digital commerce doesn’t mean digital payments
Iraq has always been a high-velocity cash economy. People buy, sell, ship, and restock constantly. Cash is the default tool that keeps those transactions moving.
Even during periods of volatility (be it economic turbulence or actual armed conflict), commerce continues. Markets stay open, wholesalers distribute, petrol stations operate, and households spend. Most of that activity runs on cash.
This large consumption-driven economy, operating with limited modern payment rails, is where the Iraqi fintech story begins.