Iranian businesses are increasingly turning to "buy now, pay later" schemes and other cost-saving measures as the country grapples with rapidly rising inflation and a shrinking consumer spending capacity amid ongoing conflict and international sanctions. The economic strain has intensified following months of conflict with the United States and a naval blockade that has severely disrupted trade.
In Tehran, companies such as SnappPay have launched advertising campaigns promoting deferred payment options for a wide range of goods, including clothing, electronics, gold, and even holiday travel. Delivery services linked to SnappPay, like SnappFood, have also introduced smaller portion sizes for traditional dishes such as ghormeh sabzi and pizzas, reflecting consumers’ diminished purchasing power.
The difficult economic environment is driven by a combination of factors, including the March 2024 onset of conflict involving Iran, the United States, and Israel, and the re-imposition of a naval blockade on Iranian ports after a short-lived agreement to reopen the strategic Strait of Hormuz fell apart. This waterway is vital for global energy shipments, and its closure has contributed to global supply disruptions as well as intensified domestic economic pressure in Iran.
Annual inflation has remained above 80 percent for three consecutive months, with food prices rising by nearly 130 percent in the month ending July 22, according to official statistics. The Iranian rial has reached record lows amid these pressures, eroding household incomes and forcing many Iranians to adjust their spending habits drastically. The unemployment rate increased to 9.1 percent in the spring, with about 2.5 million people aged 15 or older reported as jobless.
Economists attribute the rise in installment payment options to the "desperation of producers and suppliers," as inflation has sharply reduced consumer purchasing power. Over a dozen online platforms now allow Iranians to buy goods on credit, often without interest charges. For example, SnappPay offers interest-free payment plans with credit limits typically around 500 million rials (about $270).
Many households are struggling to meet basic needs amid this backdrop. At a Tehran fresh produce market, a mother of two described how her family’s already precarious living standards deteriorated further after the war, with household income amounting to less than $5 a day. Meanwhile, consumers are increasingly selling gold holdings to cover expenses, and demand for staple foods has declined, signaling an adaptation to ongoing economic hardship.
Iran’s government has emphasized its strategy of a “resistance economy” designed to withstand sanctions and isolation. Officials remain confident that Tehran can outlast external pressures and that rising global energy prices caused by the strait’s closure will ultimately compel the United States to ease its stance. However, domestic leaders have expressed concern about the toll on ordinary citizens. President Masoud Pezeshkian recently highlighted the importance of focusing on the economic and livelihood challenges facing the population, even as he downplayed fears of further military attacks.
The blockade has also drastically limited Iran’s oil exports and fuel imports, prompting the government to consider raising petrol prices to control consumption. A pilot plan to increase fuel prices was suspended last week amid fears of triggering public unrest similar to the large-scale protests over economic grievances seen in late 2023 and early 2024. Since the war began, there have been no significant signs of renewed domestic unrest, but declining consumption and shifts in buying patterns point to growing acceptance among Iranians that difficult economic conditions may persist.
In an effort to alleviate hardships, the government has implemented a food voucher program providing approximately $5 monthly to nearly the entire population. However, rapid inflation has eroded the real value of this aid, leading authorities to plan adjustments that would reduce support for higher-income recipients while increasing assistance for lower-income groups.
In Tehran neighborhoods, markets selling subsidized groceries report substantial declines in customer numbers, while more modest food options have replaced pricier traditional dishes for many families. Businesses such as falafel shops have seen their clientele shrink as ingredient costs rise, underscoring the broad impact of economic challenges on everyday life across Iran.