Turkey is rapidly implementing the items included in the 11th Development Plan for a fintech ecosystem that will create equality of opportunity.
- Previously, ‘payment systems’ fell within the authority of the CBRT, while ‘payment service providers’ and ‘e-money companies’ fell within the authority of the BRSA. With the law amendment proposal approved by Parliament, some of the BRSA’s powers were transferred to the CBRT. With this step, coordination in the payments area will be provided by a single public authority.
- Alignment with PSD2 in the legislation was achieved by expanding the scope of payment service activities. Accordingly, account information services and payment initiation services were defined as payment services.
- The procedures and principles for sharing data with third-party institutions will likewise be determined by the CBRT.
- In line with the law amendment, the Payment and Electronic Money Institutions Association of Turkey, membership in which will be mandatory for all payment and e-money institutions that have obtained an operating license, will also be established.
What powers are given to the Central Bank?
To transfer the BRSA’s duties and powers under Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions to the Central Bank, the power to issue secondary regulations is being transferred to the Central Bank.
The Central Bank is being given the power to determine the nature, as well as the maximum amounts or rates, of fees, expenses, commissions and other benefits received by one of the parties to a transaction, under any name, in relation to a specific type of transaction within the scope of payment services, and to liberalize them partially or fully.
The CBRT will be able to decide that the following are to be treated as payment services once their total size and sphere of impact reach a level to be determined by the Central Bank: transactions involving instruments that can be used only at the issuer’s own premises, within a limited network of service providers, or for the purchase of goods or services within a limited range under a commercial agreement with the issuer of the payment instrument; transactions where the payment transaction is carried out through a commercial agent authorized to negotiate or conclude the sale or purchase of goods or services on behalf of the payer or the payee; and other similar transactions.
Under the Law, the Central Bank will monitor the legal relationships to which payment service providers are party as a result of their activities, in order to identify problems that may arise in this area and to determine areas for improvement.
If it is determined that there are circumstances and practices that could adversely affect the development of the payments area, the Central Bank is being given the power to set up working committees on the matter, to determine the working procedures and principles of these committees by obtaining the views of the relevant parties, and to carry out the work and actions necessary for implementing the decisions taken in these committees.
The Central Bank is also being given the power to determine all procedures and principles for sharing data held by one payment service provider with another payment service provider within the scope of payment initiation and account information activities.
The CBRT will be able to decide that transactions carried out with prepaid instruments that can be used only within the issuing institution’s own store network, only for purchasing a specific group of goods or services, or only within a specific service network as a result of an agreement, are to be evaluated within the scope of the Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions once their total size and sphere of impact reach a certain level to be determined by the Central Bank.
PTT is also affected by this regulation
Taking sector demands into account, the procedures and principles for banks blocking, at the Central Bank, the funds that e-money institutions deposit with them are being removed from the law, to be regulated in secondary legislation.
The Central Bank is being given the power to determine which activities of e-money institutions will not be considered credit-granting activities.
The BRSA’s duties and powers under Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions will be transferred to the Central Bank, and the Central Bank will become the authorized authority in the payments area.
Provisions are being added to the Law giving the CBRT the authority to carry out inspections of banks that must comply with the regulations on payment services and e-money issuance.
To make the process of the Central Bank inspecting PTT’s activities in the payments area more effective, some of the matters applied in the inspection of payment and e-money institutions will also apply to PTT.
The amounts of administrative fines that can be imposed under the Law are being updated, taking the revaluation rate into account. It is being made possible to file a lawsuit before the competent administrative court against these administrative fines.
With the Law, transitional provisions relating to this amendment are also being regulated, owing to the transfer of the BRSA’s duties and powers under Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions to the Central Bank.
