Iraq is one of the largest consumer markets in the Arab world, and most online sellers still overlook it. Nearly everyone has a smartphone, social media is where shoppers discover products, and the habit of paying the courier in cash runs deeper than almost anywhere else in the region. For a seller used to cash on delivery (COD) in Morocco, Egypt or Algeria, that sounds familiar. Iraq has its own rules, though: an e-commerce regulation that is still being put into practice, a currency with an official rate and a market rate, addresses built on landmarks, and buyers who have learned to distrust online pages.

This guide covers the market, why cash dominates, the trust problem, the rules, pricing in dinars, delivery, order confirmation and how to run the day-to-day operation. It is general information, not legal or tax advice: check your own situation with a professional in Iraq before you start.

Iraq’s online market in figures

United Nations data published by DataReportal puts Iraq’s population at 47.3 million in October 2025. Of those, 39.6 million people were using the internet at the end of 2025, a penetration of 83.8%, and 72.2% lived in urban centres. The phone is the device that counts: GSMA Intelligence counted 50.8 million cellular mobile connections, and 86.2% of them are broadband (3G, 4G or 5G). Your product pages and your order form have to be designed for a phone screen first.

The online market itself is harder to size, because much of it happens in direct messages rather than on checkout pages. An economic analyst quoted by Shafaq News estimated that Iraqi e-commerce generated more than $700 million in revenue in 2024 and could exceed $1 billion within the next few years, with tens of thousands of online purchases every day. Treat that as one analyst’s estimate, not an official statistic.

The demand is not new. The Iraq Consumer Survey 2020, cited by Access Partnership, found that 57% of Iraqi internet users shopped online during 2020. The same analysis noted more online shopping in Kurdistan than in Central and Southern Iraq. Iraq is not one uniform market: Baghdad, Basra, Erbil and Mosul differ in buying power, language and delivery conditions, so test city by city rather than treating the country as a single block.

Why cash on delivery is the default

In Iraq COD is not one payment option among several; for many buyers it is the only one. Shafaq News puts it plainly: Iraq’s online retail market relies heavily on cash on delivery, allowing customers to order goods without bank cards or digital payment services. The analyst quoted in the same report estimated that 60-70% of online purchases still rely on cash on delivery, which he linked to consumers’ reluctance to pay before inspecting the goods.

The reason is structural. Access Partnership notes that a significant part of the Iraqi population does not have a bank account, and that the most popular way to shop online is to message the seller through an app or website and then pay cash on delivery. In practice, many Iraqi “stores” are a social-media page, a chat thread and a courier.

That is changing, slowly. In July 2026 the Central Bank of Iraq met licensed electronic payment providers to push its roadmap to transition away from a cash-heavy economy, and asked them to expand point-of-sale acceptance networks. Its Basra branch has launched a campaign to deploy point-of-sale devices in public transport vehicles and taxis under the National Financial Inclusion Strategy 2025-2029. For an online seller, the conclusion for the coming years is simple: build the business around cash, and offer card or wallet payment as an option to buyers who have one, without making it a condition.

The trust problem: scams, refusals and vanished pages

Cash on delivery has a cost in Iraq that sellers from other markets underestimate: the damaged reputation of the whole channel. The same Shafaq News report explains that COD has also enabled unverified sellers and fake online stores to flourish. Buyers describe a common scam: polished photos, an attractive price, a request for only a customer’s name, province and phone number, then a parcel that looks nothing like the ad. The courier cannot help, because drivers have no authority to process returns or replacements, and when the buyer tries to reach the seller, the page has often disappeared.

For an honest seller, the consequence is that every new customer arrives suspicious, and suspicion shows up as refusals at the door. A buyer who has been burned once will open the parcel, compare it with the ad and refuse it at the slightest doubt. Three habits reduce that risk:

Show who you are. A consistent brand name, a phone number that answers, real photos of the product you actually ship, and a written return and exchange policy. That is exactly what the pages that vanish do not have.
Describe the product exactly. Size, material, colour and what is in the box. Every gap between the ad and the parcel becomes a refusal, and you pay for the delivery both ways.
Confirm before you ship. A short call or message that repeats the product, the price and the delivery area filters out impulse orders and fake numbers before they cost you a courier fee. Our guide to preventing fake COD orders covers the warning signs.

The rules: E-Commerce Regulation No. 4 of 2025

Iraq now has a dedicated legal framework. According to a summary by the law firm Al Tamimi & Company published on Mondaq, E-Commerce Regulation No. 4 of 2025 was introduced under Cabinet Resolution No. 135 of 2025 and published in the Official Gazette (Issue No. 4818 on 10 March 2025), and took effect in April 2025. Its reach is wide: it applies to all e-commerce activities where either the seller or the customer is in Iraq, which covers a seller based abroad who ships to Iraqi buyers.

The main obligations described in that summary:

A licence. Online merchants must obtain a license from the Ministry of Trade before trading, through an electronic application. Licences are valid for three years and are renewable, and merchants must also comply with commercial registration and the Trademark and Commercial Data Law No. 21 of 1957.
Information on the store. The definition of an e-store explicitly covers websites, mobile apps and social media. It must show the merchant’s identity, licence number, product details, pricing, terms of sale, return policy and privacy policy.
Customer data. Merchants must collect only necessary information, and obtain explicit consent before using or sharing customer data, and notify customers and the authorities after a data breach.
Tax. The General Commission for Taxes is to set a mechanism for taxing e-commerce; at the time of the summary it had not issued one.

One important caveat: in July 2025 the authors wrote that the Regulation has not yet been implemented in practice, pending the Ministry of Trade’s online licensing platform. Check the current status with the Ministry or a local lawyer before you launch. The direction is clear, though, and it favours serious sellers: a visible identity, a licence number and a clear return policy are exactly what Iraqi buyers say they are missing. Non-compliance can lead to monetary penalties and suspension of business.

Pricing in dinars when the dollar moves

Iraqi buyers pay in Iraqi dinars (IQD), while many sellers buy stock, pay suppliers or pay for advertising in US dollars. There are two rates to watch. According to Peregraf, in June 2026 the official rate remained fixed at 1,320 dinars per U.S. dollar, equivalent to 132,000 dinars per $100, while on the parallel market the dollar reached 155,500 dinars per $100, more than 23,000 dinars above the official rate. The Central Bank denied any plan to change the official rate.

For a COD seller, that gap matters in three places:

Cost price. Work out each product’s cost at the rate you actually pay for your dollars, not at the official rate.
Price points. Round dinar amounts are easier for couriers to collect and for buyers to have ready in cash. Review them whenever the market rate moves noticeably.
Margin per delivered order. Count profit per parcel delivered, not per order placed, since a refused parcel still costs the delivery. The method is in our guide to profit per delivered COD order.

Delivery: landmarks, couriers and cash collection

Delivery in Iraq rests on local knowledge. An Iraqi e-commerce platform puts it this way: the address here isn’t a number in a map app — it’s a story of a neighborhood, an alley, and a nearby landmark. Your order form has to capture that story, not a postcode. Ask for:

the governorate and the city or district;
the neighbourhood and the nearest well-known landmark: a mosque, a school, a market, a pharmacy;
a phone number that answers, and ideally a second one;
a convenient time for delivery if the buyer works.

Most sellers work with local delivery companies rather than running their own fleet. The model, as a driver described it to Shafaq News: couriers simply collect payments and hand the money back to delivery companies in exchange for transport fees. That puts three points in any agreement with an Iraqi carrier:

Real coverage: which governorates and districts they actually serve, and their delivery times outside Baghdad.
Cash settlement: how often they pay out the cash they collected, and how they report refused parcels and fees.
Returns: how quickly a refused parcel comes back to your stock, and what it costs.

Test two carriers on the same cities for a few weeks before you commit volume. Compare delivered orders, refusals and the time between delivery and payout, then reconcile every settlement against your own order list. In a cash business, the gap between what was collected and what was paid out is where money disappears.

Ads and order confirmation

Iraqi buyers find products on social media. Advertising tools cited by DataReportal showed, in late 2025, 20.8 million Facebook users in Iraq, 21.5 million on Instagram, 24.7 million on YouTube and 40.1 million TikTok users aged 18 and above. These are ad-reach figures, not unique people, but they show where the attention is. The audiences are also skewed: 72.2% of Facebook’s adult ad audience in Iraq was male at the end of 2025, which matters if you sell products for women.

Ads bring orders; confirmation decides how many become deliveries. In a market where buyers have been scammed, the confirmation call does two jobs: it filters out fake and impulse orders, and it reassures the honest buyer that a real business stands behind the page. Good practice:

Call or message quickly, while the buyer still remembers the ad.
Speak the buyer’s language: Iraqi Arabic in Baghdad and the south, and Kurdish where your Kurdistan buyers prefer it.
Repeat the product, size, colour, total price in dinars including delivery, and the landmark-based address.
Tell the buyer the courier will call, so the phone gets answered.
Iraq is three hours ahead of GMT: if your team works from Morocco, its morning is midday in Baghdad, and Iraqi evenings fall in its afternoon.

Running the operation with Cashod

Once orders arrive every day, a shared spreadsheet is no longer enough. Cashod covers the steps above:

Confirmation by phone. Cashod includes a call center where agents confirm COD orders by phone.
Confirmation on WhatsApp. Cashod can confirm orders over WhatsApp, including with an AI agent.
Returns. Cashod tracks returned parcels; each carrier’s delivery and return fees are set per city.
Several stores. One Cashod account can manage several stores, for example one store per country if you sell in Iraq alongside another market.
Other carriers. Any other carrier can be added to Cashod manually, without automatic shipment creation or tracking.

Cashod support answers by email, chat and phone, Monday to Friday, 9 AM to 6 PM GMT (Morocco time), which is midday to 9 PM in Baghdad.

Launch checklist for Iraq

Check the status of the Ministry of Trade licence and the registration you need.
Show your identity, a contact number, your return and exchange policy and your privacy policy on every sales page, social media included.
Set round prices in dinars, worked out from your real cost in dollars.
Build the order form around governorate, district, landmark and two phone numbers.
Confirm every order before shipping, in the buyer’s language.
Test two carriers, then reconcile every cash settlement against your orders.
Track refusals by city and product, and stop advertising what keeps coming back.

Iraq rewards patient sellers. The market is connected, cash on delivery is the norm, and buyers’ wariness leaves real room for stores that show who they are, describe their products honestly and confirm every order. Start with a few cities, measure your real delivery rate, and widen only once your numbers hold steady.

Selling COD in Iraq: payments, delivery and rules