PAYMENTS IN TURKEY
Turkey was a parliamentary representative democracy up until 2018, when a presidential system was adopted following a referendum. The new system came into effect with the presidential election of 2018.
For several years, Turkey has made efforts to join the European Union. Turkey’s screening process, which is the first phase of EU accession negotiations after Turkey was given a candidate country status by the EU, began on 3 October 2005 and ended on 13 October 2006. Since then, no progress has been made, although Turkey continues to follow an EU harmonisation process, including aligning its payment services with EU regulations.
The Turkish central bank (TCBM) continues to provide the Turkish Ministry of Foreign Affairs, Directorate for EU Affairs with information concerning the developments in the chapters for which it is responsible so that the Ministry can monitor the progress being made in Turkey’s harmonization with the EU, and forward this information to the European Commission.
Turkey is one of the most digitally advanced countries in Southern Europe, with its youth demographics heavily favouring digital payment solutions. Turkey maintained its position as the leading country in Europe in terms of both credit and debit cards in 2020, with the share of payment transactions standing at 67% and the share of cash withdrawal transactions at 33%. Given that the share of payment transactions was 60% in 2019, such an increase in one year shows how debit cards are increasingly used as a payment tool through cards, apps and mobile services.
With Open Banking now legislated for as of 2020, uptake of these services is expected to grow strongly from 2021 onwards.
Disruptive technologies have set the stage for digital payments for the digital economy in Turkey. They have accelerated digital payment transformation and mobile payment services, as well as cardless IBAN-based payments directly from bank accounts.
In the last decade, Turkish consumers have embraced mobile devices such as tablets, smartphones and Internet of Things (IoT). This change significantly impacts their shopping experience. Consumers have become increasingly connected and they have started to purchase anywhere, at any time, from any device.
In addition, new consumer demands are a game changer. Turkish consumers like digital banking apps with access to all their accounts at different banks in one single app, with the option to make payments directly from their bank account of choice. Additionally, they appreciate more banking services and payment services added to their mobile banking app. Consumer adoption of digital payments in Turkey is driven by minimal cost, secure payments and a high level of user convenience.
Driven by the development of social media and mobile devices, the emergence of permanently connected consumers has impacted their interactions with brands but also their expectations of how to shop using the increasing number of touch points between consumers and merchants, e.g.:
- Using mobile devices in-store to look up products or additional information on the internet
- Using mobile devices in-store to shop at the same merchant or online at another merchant
- Using mobile devices to purchase at home in online shops or scan outdoor for advertised products
- Using mobile apps to shop online, or using QR-codes to bridge from merchant posters to their online shops
The ongoing rollout of a mature online and mobile communication infrastructure is an enabler for digital card payment transformation and for Open Banking payments in Turkey.
In a few years from now, mobile banking apps and mobile payment apps are expected to combine account management, digital payment services, personal finance management and value-added digital services from location finders to digital vouchers.
Cash payments, card payments and cardless payments directly from bank accounts (A2A payments) remain all relevant for Turkish merchants and are heavily used by Turkish consumers.
This country profile provides an introduction into two competing payment ecosystems in Turkish:
- Card payment ecosystem
- Cardless Open Banking payment ecosystem
STATISTICAL KEY FIGURES FOR 2020 PROVIDED IN THIS PROFILE:
• UPDATED: tables with card business data 2016-2020; growth rates: Y-o-Y, CAGR
• Population, Cards per Capita, Card Value per Capita
• Debit Cards, Credit/Delayed Debit Cards, Total Cards
• Card payments by number and by value, ATV per card, payments per card/year
• ATMs, POS terminals, ATMs/POS terminals per 1 million capita
• ATM withdrawals by number/by value, ATV per withdrawal, TXs per ATM/month
• POS payments by number/by value, ATV per POS payment, TXs per POS/month
• Internet Use, e-payment mix, B2C e-Commerce by value and growth rate
• Issued Card brands by individual major issuer bank
• Accepted card brands by individual major acquirer
• Drill down into the debit card use and credit cards use details
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Version 1.0 - last updated Wednesday 26th January 2022