Cases

Card-based dollar arbitrage: Iraqi prepaid and debit cards on the Visa and Mastercard networks (from 2023 to 2025)

After the US Treasury and the New York Fed closed the wire-transfer route used by Iraqi banks in late 2022, and the Central Bank of Iraq allowed card payments abroad at the official rate from early 2023, cross-border card transactions from Iraq on Visa and Mastercard rose from $50 million a month or less at the start of 2023 to about $1.5 billion in April 2023, and stayed between about $400 million and $1.1 billion a month until early 2025, according to The Wall Street Journal (31 May 2025), citing US and Iraqi officials and documents. Cardholders withdrew dollars abroad at the official rate and sold them in Iraq at the higher market rate; the paper puts the value of the price gap that went to cardholders at about $450 million in 2023 and the networks' fees at nearly $120 million. US officials told the paper that Iran-backed militias used the scheme on an industrial scale; it also says the Iraqi card issuers were not under sanctions and that there is no public allegation that Visa or Mastercard broke sanctions. Measures it reports: the Treasury asked the central bank to block more than 200,000 militia members' cards (May 2025); Mastercard blocked more than 100,000 Iraqi cards in March 2025 and Visa flagged 70,000 in April 2025; the central bank set a $300 million monthly cap on cross-border card transactions and a $5,000 monthly cap per cardholder. The figures are the paper's, from unnamed sources; none is an official finding.

Period: From January 2023 to June 2025
Sector: Banking and currencyPayment cards
Kind of case: Press investigation (allegations), with measures by regulators and card networks
Jurisdiction: Iraq; United Arab Emirates; United States

How the money moved, according to the sources

This account is the one given by the sources listed on this page. It is not the finding of a court.

Dollars obtained abroad at the official rate (IQD 1,320) with Iraqi-issued prepaid and debit cards, through cash withdrawals, sham merchant charges (for example in the UAE) and point-of-sale 'farms', then sold in Iraq at the market rate (up to about IQD 1,600 in 2023); the WSJ reports a gap of up to 21% between the two rates.

What happened

Measures reported by the WSJ (2025): a Treasury request to block more than 200,000 militia members' cards; Mastercard and Visa card blocks and merchant removals in the UAE; Central Bank of Iraq caps, monitoring by the New York firm K2, and a requirement that issuers move to Iraqi banks with US correspondents. The paper says the Treasury 'blacklisted' three card issuers, including Al Saqi; no OFAC designation is on record.

Open questions

Which legal instrument, if any, the Treasury used against the three card issuers; which bank is the 'First Iraqi Bank' whose Visa Direct service carried $1.2 billion in two months in early 2024; whether the claim that militia commanders padded Qi Card rolls (see PMF "ghost fighters": payroll-inflation allegations and the unsolved killing of the force's finance chief) is supported by any official record; official Central Bank of Iraq data on card outflows.

People and companies

The table lists everyone this case names, with their legal status on the date shown. A status in this case does not carry over to any other case, and an accusation is not a conviction. How to read the status.

People and companies
Name	Role in the case	Legal status	Detail	As of
Yana Banking Services	Card provider based in Erbil, partner of Mastercard (WSJ)	Accused in credible reporting	The Wall Street Journal (31 May 2025) reports that a Mastercard compliance review in August 2023 found no evidence that its customers were being screened against US sanctions and found weak anti-money-laundering controls; Mastercard suspended it from issuing new cards and later lifted the suspension. Yana did not respond to the paper. This is a private card network's compliance finding as reported in the press, not a regulator's finding. Not charged as of the date of writing.	30 September 2026
Al Saqi Electronic Payment Company	Electronic payment and card company affiliated with the Holy Shrine of Al Abbas, Karbala (WSJ)	Accused in credible reporting	The Wall Street Journal (31 May 2025) reports that the US Treasury 'blacklisted' three Iraqi card issuers suspected of ties to the militias, one of them Al Saqi, and that Visa stopped processing its cards. The paper names no legal instrument, and no OFAC designation is on record. Reuters reported on 16 February 2025 that the Central Bank of Iraq would bar 'AL-Saqi Payment' from dollar dealing; the central bank denied that US sanctions had been imposed. Not charged as of the date of writing.	30 September 2026

Sources

These are the documents on which this case rests. Each quote is given in the language of the document.

The Wall Street Journal (full text reprinted by To Vima)31 May 2025Press report (unnamed source)Tier C
Needing Dollars, Iran-Backed Militias Turn to Visa and Mastercard (David S. Cloud)
Iraq was a minor market for Visa and Mastercard a couple of years ago, generating just $50 million a month or less in cross-border transactions at the start of 2023. ... In recent days, Treasury formally asked the Iraqi central bank to block the more than 200,000 cards used by militia members due to fraud concerns.
Original