Payment Gateway in Turkey: Guide & Key Regulations
Establishing a Payment Gateway (PG) company in Turkey presents an exciting opportunity for entrepreneurs and fintech firms, as Turkey's rapidly growing digital economy creates high demand for secure, efficient payment solutions. However, setting up a PG requires strict regulatory compliance, substantial investment, and thorough understanding of the market. In this article, we will explore what payment service providers do, their benefits, regulatory requirements in Turkey, and top providers in the market, step-by-step establishing a PG in Turkey, including licensing requirements, capital needs, and regulatory obligations.
What is a Payment Gateway (PG)?
A Payment Gateway(PG) is a third-party entity that enables businesses to accept electronic payments. PGs facilitate various payment methods, including credit cards, debit cards, e-wallets, and bank transfers. In Turkey, PGs play a crucial role in connecting businesses to financial institutions and ensuring secure, efficient, and compliant payment processing.
Benefits of Using a Payment Service Provider in Turkey
- Multiple Payment Options: PSPs offer a wide range of payment methods, including local payment options like Turkish bank transfers, e-wallets, and regional credit cards. This ensures customers have the flexibility to pay with their preferred methods.
- Enhanced Security: Security is a primary concern for businesses handling online transactions. PSPs often provide robust security measures, such as data encryption, fraud prevention, and compliance with PCI-DSS (Payment Card Industry Data Security Standard) requirements.
- Efficient Payment Processing: PSPs streamline the payment process, offering faster and more reliable transactions. They also reduce the risk of failed or delayed payments, enhancing the customer experience.
- Regulatory Compliance: PSPs ensure compliance with Turkish regulations, particularly those outlined by the Banking Regulation and Supervision Agency (BDDK) and Law No. 6493 on Payment Services and Electronic Money Institutions.
- International Reach: For businesses looking to expand, PSPs offer multi-currency support and localized payment options, making it easier to serve international customers and handle cross-border transactions.
Benefits of Using a Payment Service Provider in Turkey
- Multiple Payment Options: PSPs offer a wide range of payment methods, including local payment options like Turkish bank transfers, e-wallets, and regional credit cards. This ensures customers have the flexibility to pay with their preferred methods.
- Enhanced Security: Security is a primary concern for businesses handling online transactions. PSPs often provide robust security measures, such as data encryption, fraud prevention, and compliance with PCI-DSS (Payment Card Industry Data Security Standard) requirements.
- Efficient Payment Processing: PSPs streamline the payment process, offering faster and more reliable transactions. They also reduce the risk of failed or delayed payments, enhancing the customer experience.
- Regulatory Compliance: PSPs ensure compliance with Turkish regulations, particularly those outlined by the Banking Regulation and Supervision Agency (BDDK) and Law No. 6493 on Payment Services and Electronic Money Institutions.
- International Reach: For businesses looking to expand, PSPs offer multi-currency support and localized payment options, making it easier to serve international customers and handle cross-border transactions.
Key Regulations for Payment Service Providers in Turkey
Payment service providers in Turkey are governed by several regulatory frameworks, primarily overseen by the Banking Regulation and Supervision Agency (BDDK). Compliance with these regulations is essential for any PSP operating within the country.
- Law No. 6493 (Payment Services and Electronic Money Law): This law, enacted in 2013, outlines the legal requirements for PSPs and electronic money institutions in Turkey. It ensures that PSPs provide secure, transparent, and consumer-friendly payment solutions.
- Licensing Requirements: PSPs must obtain a license from the BDDK to operate legally in Turkey. This license requires meeting specific capital requirements, having a secure IT infrastructure, and implementing effective anti-money laundering (AML) and know-your-customer (KYC) measures.
- Data Protection Compliance: Turkey's Personal Data Protection Law (KVKK) mandates that PSPs protect customer data and follow strict privacy protocols.
- Customer Rights and Dispute Resolution: Under Turkish regulations, PSPs must provide clear information on fees, transaction details, and support dispute resolution mechanisms for customers.
Top Payment Gateway Providers in Turkey
Several PGPs have established themselves as market leaders in Turkey, providing efficient and reliable payment solutions. Here are some of the top providers:
- iyzico:
- Overview: A leading Turkish PGP, iyzico offers a wide range of payment solutions tailored for businesses of all sizes.
- Key Features: Supports multiple payment methods, offers fraud detection, and is integrated with major e-commerce platforms.
- Target Audience: Popular among e-commerce businesses and SMEs in Turkey.
- PayU:
- Overview: A global PSP, PayU provides localized payment solutions for Turkish businesses, enabling them to accept payments both domestically and internationally.
- Key Features: Multi-currency support, fraud prevention, and easy integration with websites and mobile apps.
- Target Audience: Ideal for businesses expanding internationally, especially in emerging markets.
- Papara:
- Overview: A Turkish digital wallet and PSP, Papara allows users to make online payments, transfer money, and pay bills easily.
- Key Features: Quick integration, user-friendly interface, and a range of local payment options.
- Target Audience: Freelancers, small businesses, and consumers looking for a convenient payment solution.
- PayTR:
- Overview: A popular PSP in Turkey, PayTR provides fast and secure payment solutions with a focus on e-commerce.
- Key Features: Strong anti-fraud measures, support for installment payments, and high transaction success rates.
- Target Audience: E-commerce businesses and high-volume retailers.
- Param:
- Overview: Param offers comprehensive payment solutions and is well-known for its strong compliance with Turkish financial regulations.
- Key Features: Extensive payment options, loyalty programs, and data security.
- Target Audience: Medium to large-sized businesses in retail, hospitality, and other service industries.
How to Establish a Payment Service Provider Company in Turkey
1. Understand the Market and Business Scope
Before establishing a PSP in Turkey, it's essential to:
- Conduct Market Research: Understanding local needs, competition, and potential clients is crucial.
- Define Services: PSPs can offer various payment services, such as online payment processing, e-wallet solutions, POS systems, and cross-border payments.
- Target Audience: Determine if the PSP will serve e-commerce businesses, freelancers, SMEs, or enterprises with cross-border payment needs.
2. Regulatory Framework for PSPs in Turkey
The Banking Regulation and Supervision Agency (BDDK) regulates PSPs under Law No. 6493 on Payment Services and Electronic Money Institutions. Understanding this legal framework is essential before proceeding with the PSP application process.
- Law No. 6493: Enacted in 2013, this law governs all payment and electronic money institutions, aiming to ensure a secure and transparent financial services market.
- BDDK Licensing: PSPs must obtain a license from the BDDK, and meeting its criteria is a crucial step toward operating legally.
3. Establish a Legal Entity in Turkey
To operate as a PSP, establishing a legal entity within Turkey is mandatory.
- Company Structure: Most PGPs are registered as Joint Stock Companies (JSCs) due to capital requirements and regulatory preferences.
- Corporate Headquarters: The headquarters must be located in Turkey, and all operations should be traceable by Turkish authorities.
- Shareholder Requirements: Both foreign and local shareholders can own shares, though clear documentation on ownership must be provided to the BDDK.
4. Meet the Capital Requirements
BDDK imposes specific capital requirements for PSPs to ensure financial stability and risk management. For 2024, the minimum initial capital requirements for PSPs are as follows:
- Minimum Initial Capital: PSPs must have at least 5 million TRY (Turkish Lira) in paid-up capital. This amount may vary depending on the services offered and is periodically reviewed by the BDDK.
- Paid-in Capital: The capital must be fully paid and deposited in a Turkish bank before licensing.
5. Submit a License Application to the BDDK
Obtaining a BDDK license is one of the most crucial steps in establishing a PSP in Turkey. The application process includes several detailed steps:
- Prepare Required Documents: These include business plans, financial projections, risk assessment strategies, and data protection policies.
- KYC and AML Policies: The BDDK requires comprehensive Know Your Customer (KYC) and Anti-Money Laundering (AML) policies to prevent fraud and ensure security.
- Application Submission: Submit your application and all necessary documents to the BDDK, along with the application fee.
- Approval Timeline: The approval process can take several months, depending on the thoroughness of the application and BDDK's assessment. During this time, the BDDK may request additional documentation or clarifications.
6. Develop a Secure IT Infrastructure
In compliance with BDDK and Personal Data Protection Law (KVKK) requirements, PSPs in Turkey must implement a secure IT infrastructure:
- PCI-DSS Compliance: PSPs handling card transactions must comply with Payment Card Industry Data Security Standards (PCI-DSS), ensuring data security.
- Data Encryption and Protection: Secure data encryption and storage are mandatory for protecting customer information.
- Fraud Prevention: Implement fraud detection systems and algorithms to detect suspicious activities, ensuring safe transactions for all users.
7. Appoint Key Personnel
To meet regulatory and operational requirements, PSPs must appoint key personnel, including:
- Compliance Officer: Responsible for ensuring compliance with BDDK regulations, KYC, and AML policies.
- IT and Security Experts: Handle data security, fraud prevention, and PCI-DSS compliance.
- Customer Service Team: Manage client relationships and provide support to PSP users.
BDDK requires the appointment of qualified and experienced professionals to oversee these critical roles and ensure operational compliance.
8. Implement Effective Customer Support
Customer service is essential for PSPs, as they must handle payment-related issues quickly and efficiently:
- 24/7 Support: Consider offering around-the-clock customer support for issues such as transaction disputes, payment failures, and technical support.
- Multilingual Support: Providing support in multiple languages can be a competitive advantage, especially for PSPs working with international clients.
- Clear Fee Structure: Clearly communicate any transaction fees, refund policies, and terms of service to customers to enhance transparency and build trust.
9. Begin Operations and Compliance Reporting
Once licensed, PSPs must maintain compliance with BDDK reporting and operational requirements:
- Monthly and Quarterly Reports: PSPs must submit regular financial and operational reports to the BDDK, including information on transactions, risk management, and compliance with KYC/AML requirements.
- Annual Audits: PSPs are subject to yearly audits by BDDK to ensure they meet operational standards and regulatory compliance.
- Fee Disclosure: BDDK requires PSPs to provide transparent fee structures, so clients are aware of transaction costs, service fees, and any potential hidden charges.
10. Marketing and Expanding Your PSP
With all regulatory requirements met, PSPs can focus on growth and expansion:
- Target Marketing: Define your niche, such as e-commerce businesses, SMEs, or freelancers, and tailor marketing campaigns to reach these audiences.
- Partnerships with Banks and Fintechs: Forming partnerships with Turkish banks and other fintech companies can strengthen your offerings, such as enabling installment payments or mobile wallet solutions.
- Innovative Payment Solutions: Stay competitive by offering unique features like recurring billing, buy-now-pay-later options, and loyalty rewards for users.
Contact With Us to Establish a Payment Gateway Company in Turkey
Payment service providers play a vital role in Turkey's dynamic digital economy, enabling businesses to accept payments efficiently and securely.
By considering factors like payment options, security, and regulatory compliance, businesses in Turkey can leverage PSPs to enhance customer satisfaction and streamline their payment processes.
Establishing a payment service provider in Turkey involves navigating a comprehensive regulatory framework, meeting capital requirements, and ensuring strict compliance with security standards.
While the process may seem challenging, Turkey's thriving digital market offers vast potential for PSPs that provide reliable, secure, and efficient payment solutions.
By following the correct procedures, providing accurate documentations, and staying compliant with Turkish fintech regulations , investors & enrerprenuers can maximize their chances of successfully establishment of teheirs PSP's in Turkey.
A&M Consulting Co. is an accounting & tax consulting firm specialized in providing end-to-end establishment of Payment Service Provider Company for especially global investor and foreign entrepreneurs in Turkey
We continue to offer cost-effective accounting & tax consulting services to global companies and individual entrepreneurs who want to enter the Turkish market smoothly and quickly, to ensure their full compliance with local legislation and to establish their fintech companies.
FAQs About Payment Gateway in Turkey
What is a Payment Gateway (PG)?
A Payment Gateway(PG) is a company that facilitates online and digital payments for businesses, enabling them to accept credit cards, bank transfers, and e-wallet payments securely and efficiently.
Who regulates Payment Service Providers in Turkey?
PSPs in Turkey are regulated by the Banking Regulation and Supervision Agency (BDDK) under Law No. 6493 on Payment Services and Electronic Money Institutions.
What are the types of payment services offered by PSPs in Turkey?
PSPs in Turkey offer services like credit and debit card processing, mobile payments, e-wallets, bank transfers, and POS (Point of Sale) solutions, among others.
What is the minimum capital requirement for starting a PSP in Turkey?
To establish a PSP in Turkey, the BDDK requires a minimum paid-up capital of 5 million TRY. This requirement may vary depending on the scope of services offered.
Do Payment Service Providers in Turkey comply with international security standards?
Yes, PSPs in Turkey typically comply with PCI-DSS (Payment Card Industry Data Security Standards) and implement strong data encryption and anti-fraud measures to protect transactions.
What documentation is required to apply for a PSP license in Turkey?
Required documentation includes business plans, financial projections, risk management policies, KYC and AML protocols, and data protection policies, among others.
How long does it take to get a PSP license in Turkey?
The licensing process can take several months, depending on the completeness and accuracy of the application and the BDDK's review period.
Can a foreign company establish a PSP in Turkey?
Yes, foreign companies can establish a PSP in Turkey; however, they must establish a legal entity within Turkey and comply with all BDDK regulations.
What are the common payment options supported by PSPs in Turkey?
PSPs in Turkey commonly support credit and debit cards, bank transfers, installment payments, e-wallets, and alternative payment methods like mobile wallets.
Is it mandatory for PSPs in Turkey to comply with data protection laws?
Yes, PSPs must comply with Turkey's Personal Data Protection Law (KVKK) to ensure the privacy and protection of customer data.
What are the ongoing compliance requirements for PSPs in Turkey?
PSPs must submit regular financial and operational reports to the BDDK, conduct annual audits, and ensure ongoing compliance with KYC, AML, and data security protocols.
What are the penalties for non-compliance with BDDK regulations?
Non-compliance with BDDK regulations can lead to penalties, license suspension, or legal actions, depending on the severity of the violation.
Can PSPs in Turkey support international payments?
Yes, many PSPs in Turkey support international transactions with multi-currency options, though cross-border payments must comply with local regulations.
How can a PSP improve the payment experience for customers?
PSPs improve the payment experience by offering multiple payment options, providing a secure and reliable checkout process, supporting localized payment methods, and enabling fast, seamless transactions.
What is required to establish a Payment Service Provider (PSP) company in Turkey?
To establish a PSP, you must register a legal entity in Turkey, obtain a BDDK license, meet minimum capital requirements, and set up a secure IT infrastructure.
What types of legal structures are available for establishing a PSP in Turkey?
PSPs are typically established as Joint Stock Companies (JSCs) due to regulatory and capital requirements.
Is it necessary for foreign investors to partner with local entities to establish a PSP in Turkey?
No, foreign investors do not need local partners, but they must establish a legal entity within Turkey and meet all BDDK regulations.
What is the minimum paid-up capital required to start a PSP in Turkey?
As of 2024, the BDDK requires a minimum paid-up capital of 5 million TRY for PSPs, although this amount can vary based on the services offered.
What types of legal structures are available for establishing a PSP in Turkey?
PSPs are typically established as Joint Stock Companies (JSCs) due to regulatory and capital requirements.
Is it necessary for foreign investors to partner with local entities to establish a PSP in Turkey?
No, foreign investors do not need local partners, but they must establish a legal entity within Turkey and meet all BDDK regulations.
What documents are required for a PSP license application in Turkey?
Documents include a business plan, financial projections, risk assessment, IT security policies, and KYC/AML procedures, along with proof of capital.
Are there specific compliance measures required for PSPs in Turkey?
Yes, PSPs must comply with PCI-DSS standards, Turkish data protection laws (KVKK), and BDDK's KYC/AML protocols to ensure secure transactions.
Do PSPs in Turkey need to conduct regular audits?
Yes, PSPs are required to conduct annual audits and submit regular compliance reports to the BDDK, covering financials, transaction details, and risk management.
Can a PSP operate in Turkey without a physical office?
No, a PSP must have a registered office and headquarters in Turkey, as stipulated by BDDK regulations.
What penalties are imposed for non-compliance with BDDK regulations?
Non-compliance can lead to fines, license suspension, or revocation, and in severe cases, legal actions may be taken against the PSP.
Can PSPs in Turkey handle cross-border payments?
Yes, PSPs can offer cross-border payments, but they must ensure compliance with foreign exchange and cross-border transaction regulations.
What are the costs associated with establishing and operating a PSP in Turkey?
Costs include the initial paid-up capital, license application fees, compliance-related expenses, IT infrastructure, personnel salaries, and ongoing operational costs.
Are there any tax benefits or incentives for PSPs in Turkey?
While there are no PSP-specific incentives, companies in Turkey may qualify for general corporate tax incentives, especially if investing in technology or R&D.
Can PSPs offer e-wallet services in Turkey?
Yes, e-wallet services can be offered, but they may require additional compliance measures, particularly under electronic money regulations by BDDK.
How can I ensure my PSP meets all Turkish regulatory requirements?
Consulting with local legal and financial experts in Turkish fintech regulations can help navigate the licensing process, compliance, and operational requirements efficiently.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
