Iran-backed militias are turning to Visa and Mastercard

Armed groups lost access to dollars when a banking loophole was closed. They quickly pivoted to exploit a currency-exchange scheme using cards that at its peak involved $1.5 billion a month.

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. Then it exploded to around $1.5 billion in April that year, a 2900% increase almost overnight.

What changed? Iraqi terrorist groups figured out how to squeeze dollars on an industrial scale from Visa and Mastercard’s payment networks for themselves and for their allies in Iran, according to US and Iraqi officials and documents reviewed by The Wall Street Journal.

As the fight against these terror groups continues, the US is using its influence on worldwide banks and money keeping and lending organizations to try to squeeze terrorist groups out of money. It has worked in many ways, with Hamas so low on funds that they can’t pay their fighters.

But for now, many of these groups have found a way to keep the money flowing, to continue their terrorist activities against the US and its allies. Whether the US will be able to stop these groups from using Visa and Mastercard remains to be seen.