According to a decision taken by the Central Bank of the Republic of Turkey, a cap has been placed on the commission that banks charge merchants for credit card purchases.
Under the regulation, which applies to purchases made after November 1, 2019, if the payment for goods and services is transferred to the accounts of the banks' contracted merchants on the following day, the commission rate applied cannot exceed 1.60 percent.
If the transaction amount is not transferred for the merchant's free use on the following day, the maximum commission rates in question will decrease, taking into account the number of days between the day after the transaction date and the date the transaction amount becomes available for the merchant's free use.
So what does this decision mean for cardholders?
Once this regulation takes effect, it will enable price reductions and allow cardholders to purchase products at lower prices.
With the cap placed on credit card commissions, which had previously reached up to 3 percent, this cost reduction will start to be reflected in product prices toward the end of November and the beginning of December.
How should we view this situation from the banks' perspective?
POS terminals are the payment systems instrument from which banks make the most profit. Banks will experience a significant decline in their POS revenues. It is clear that these developments will push banks to offer new products and services to customers. In addition, since the commission rate cannot exceed 1.60 percent, banks' profitability will decrease; this will, in turn, affect how often rewards and campaigns are offered to cardholders and will reduce reward amounts.
Although the regulation may seem negative for banks at first glance, since we cannot clearly predict how banks will respond, I think we will be able to give a clearer assessment by the end of 2020.
