Doing Business in Türkiye: FinTech

Payment services and e-money institutions

As of 2024, the total transaction volume of electronic money and payment institutions in Türkiye has reached ₺5 trillion, with 86 institutions currently operating in this space. For 2024, this volume is expected to rise to ₺7 trillion. In comparison, the banking sector’s total transaction volume reached ₺120 trillion in 2023. While electronic money and payment institutions still trail behind banks in terms of transaction volume, their rapid annual growth signals an increasing influence within the financial sector. The growing demand for digital payment systems and technological advancements further fuel this expansion.

Additionally, platforms like BKM play a crucial role in facilitating digital payments between banks. BKM Express, for instance, has streamlined the digital payment process, taking over a portion of the transaction volume traditionally handled by banks. As of 2023, BKM is estimated to manage approximately 15 percent  of the total transaction volume processed by banks.

Security Settlement Systems, Payment Services and Electronic Money Institutions Law No. 6493 applies to payment systems, security settlement systems, payment institutions and electronic money institutions operating in Türkiye. Only banks and payment service providers authorized by the Central Bank are allowed to carry out payment services in Türkiye.

Institutions wishing to operate as electronic money or payment institutions are required to apply to the Central Bank for a license. This application process consists of three stages:

1. Pre-Assessment: The company’s articles of association, management structure and capital adequacy are subject to preliminary review. This stage evaluates whether the company meets the necessary requirements.
2. Detailed Examination: During this phase, the company’s business plan, technological infrastructure, internal control and risk management systems are thoroughly reviewed. If the application is accepted, the Central Bank conducts a more detailed assessment of the submitted documents and plans.
3. License Approval: If it is determined that the company meets all the requirements and the Central Bank grants the license, allowing the company to commence its operations.

The application fee for the license is approximately ₺1.5 million as of 2024. This fee is a mandatory cost that must be paid during the evaluation process and is part of the steps the company must complete to obtain the license.

Institutions that successfully complete the licensing process can issue electronic money or provide payment services.

Open banking

Open banking provides a way for third parties, with consent, to access personal financial data maintained by banks. Open banking has dismantled the monopoly once held by the banks over customer financial data and opened new competitive avenues in FinTech. Thus, the Central Bank has published a guideline regarding possible set-ups for open banking. Article 12 of the Payment Law, which was updated on November 2, 2019, added payment order initiation service and services of providing consolidated information on online platforms, while also defining the Payment Services Data Sharing Services as payment services under the law.

BKM API Gateway, which was designed for the needs of the country and developed with domestic resources, was commissioned on December 1, 2022. Payment service providers, the top 10 banks that had payment accounts and were among the top 10 participants in the CBRT Payment Systems in terms of the total number of payment transactions in 2020 were required to connect to the BKM API Gateway by December 1, 2022, while other payment service providers, the banks, payment and electronic money institutions, were required to connect to the BKM API Gateway by December 1, 2023.

It was assessed that it would be appropriate to grant additional time, particularly for payment and electronic money institutions, to complete their technical and operational work smoothly, and as a result, the compliance deadlines were extended. As long as BKM delays the integration processes, the development of open banking in Türkiye will continue to be hampered. The new compliance date has been extended to April 7, 2025.

Digital banking

As digital banks gain global momentum, traditional banks face challenges from these new players that offer simple, user-friendly products, data-driven interactions and quick loan approvals, often eliminating fees and commissions. With its tech-savvy population, Türkiye is no exception to the worldwide shift in customer preferences toward digital platforms. The long-awaited Regulation on Operating Principles of Digital Banks and Service Model Banking (the "Regulation") finally came into effect on January 1, 2022 to address this accelerating trend.

The Regulation outlines the procedures and principles for (i) branchless banks that exclusively provide services through electronic channels such as internet banking, mobile banking, telephone banking, ATMs and WAP-banking and (ii) banking services provided to financial technology companies and other businesses via a Banking-as-a-Service (BaaS) model. The Regulation holds significance for allowing entities without banking licenses to establish digital banks, by introducing an exclusive license for digital banking.

In line with general principles, digital banks can perform all activities allowed for credit institutions, while adhering to both the Regulation and other legal provisions applicable to credit institutions. These activities vary according to their classification as deposit or participation banks. Likewise, digital banks are subject to same conditions for establishment and operation as traditional banks, as set out in the Regulation on Transactions of Subject to Authorization and Indirect Shareholding ("Authorization Regulation"). Additional provisions from the Regulation, however, apply to digital banks without prejudice to the provisions of the Authorization Regulation. Such additional provisions also include a ₺1 billion minimum capital requirement to be paid in cash without any kind of collusion, and conditions regarding digital banks' management, operating program and business plan along with the adequacy assessment of information systems.

The Regulation further introduces restrictions for enabling a smoother integration of digital banks into the Turkish banking landscape and maintaining the distinction between business models. Accordingly, digital banks can only engage with financial consumers and small and medium-sized enterprises but may extend loans to large-sized enterprises and other banks. Although digital banks must open a physical office and may receive support services from support service organizations, they cannot operate branches. This restriction further includes correspondents, agencies, representation offices and other similar units and excludes the general directorate and associated service units. Digital banks must also apply income-based limitations when offering unsecured consumer loans and face monetary limits if the income cannot be determined. To lift some of these limitations, digital banks may apply to the BDDK) after increasing their minimum paid-in capital, ₺1 billion to ₺2.5 billion. Currently, there are 6 digital banks that have received pre-approval and are operational.

Virtual currencies and platforms

Virtual currency (electronic money) in Turkish law refers to the monetary values backed by funds collected by the electronic money issuer, stored electronically, used to perform payment transactions and accepted as a means of payment by natural as well as legal persons other than the electronic money issuer. Electronic money and electronic money issuers are strictly regulated. On December 29, 2022, the Central Bank issued a statement regarding the digital Turkish Lira which can be considered as a stablecoin and has stated that they are currently testing payments in digital TL. The statement further reveals that the Central Bank prioritizes working on the legal framework for payments in digital TL and that the digital TL will be put into use in the near future.

In addition, the “bigram Gold” project, which flows through the blockchain network realized jointly by the Central Bank, Borsa Istanbul and Takas Bank, is active and gold can be traded as a virtual value.

Regulations have been established by the Capital Markets Board regarding platforms and crypto trading exchanges in Türkiye, which are subject to licensing . Platforms operating before the new regulation was established, submitted their license applications to the Capital Markets Board on November 8, 2024, and started the license evaluation process. They can continue their activities during the decision period. Platforms that will be newly established and/or will operate for players in Türkiye will not be allowed to operate in the country until their application is finalized. There is no license application fee as there is for e-money and/or payment institutions. However, since the companies will be subject to the Capital Markets Board, there is a capital requirement in amount of ₺50 million. On the other hand, crypto platforms are also liable under MASAK and provided that the FATF is taken as a basis, they will not be able to onboard their customers without completing KYC processes. The custody accounts of the platforms must be kept in banks.

Initially, the number of platforms that have pre-notified that they will apply for a license for 2024 was 80. As of 2025, 77 out of 80 applications are still ongoing and 3 platforms have withdrawn their license applications by declaring that they will request platform liquidation. In total, 14 platforms declared that they would cease their activities and 63 platforms' applications were not accepted by the Capital Markets Board. It is not known whether all 77 companies will be approved after the licensing process. The licensing process is expected to take up to one year.