A payment institution is a legal entity authorized under the Law to provide and execute payment services. According to the Law, this legal entity must take the form of a joint stock company, and the company and its shareholders must meet the conditions set out in the second paragraph of Article 14 of the Law. The payment services that a payment institution may provide are listed in the first paragraph of Article 12 of the Law. An institution that has obtained an operating license as a payment institution under Article 14 of the Law may only provide the payment services listed in the first paragraph of Article 12 of the Law and may not engage in e-money issuance.
Article 12 of the Law is set out below:
ARTICLE 12 – (1) Under this Law, payment services means:
a) All transactions necessary for the operation of a payment account, including services that allow money to be deposited into and withdrawn from a payment account,
b) Money transfers, including direct debit transactions (including one-off ones), payment transactions made with a payment card or a similar instrument, and standing payment orders, that involve the transfer of funds in the payment account of the payment service user held with the payment service provider,
c) The issuing or acceptance of payment instruments,
c2) Money remittance,
d) Payment transactions where the payer's consent to execute the payment transaction is given through an information technology or electronic communication device and the payment is made to an information technology or electronic communication operator acting only as an intermediary between the payment service user and the supplier of goods or services,
e) Services aimed at intermediating bill payments,
f) (Added: 12/11/2019-7192/8 art.) Payment initiation services provided, at the request of the payment service user, with respect to a payment account held with another payment service provider,
g) (Added: 12/11/2019-7192/8 art.) Provided that the consent of the payment service user is obtained, the service of presenting, on online platforms, consolidated information on one or more payment accounts of the payment service user held with payment service providers,
g2) (Added: 12/11/2019-7192/8 art.) Other transactions and services in the field of payments that reach a level, in terms of total size or sphere of influence, to be determined by the Bank.
(2) The following transactions and services are not considered payment services under this Law:
a) Payment transactions made directly to the recipient in cash without using an intermediary
b) Payment transactions made through a commercial agent authorized to negotiate or sell or buy goods or services on behalf of the payer or the recipient
c) Payment transactions made by collecting and delivering money in cash within the framework of non-profit or charitable activities
c2) Services in which, immediately before the payment transaction for the purchase of goods or services is carried out, at the express request of the payment service user and as part of the transaction, cash is given from the recipient to the payer
d) Foreign currency buying and selling transactions carried out in cash and not linked to a payment account
e) Payment transactions carried out with any of the negotiable instruments under Law No. 6102, foreign bank checks, traveler's checks and paper-based postal money orders
f) Payment transactions that the Bank, settlement institutions, central counterparties, clearing houses, payment service providers and other participants of the system carry out among themselves, in their own name and on their own account, within systems
g) Payment transactions related to the capital market activities under the Capital Markets Law No. 6362 dated 6/12/2012 of the legal entities specified in subparagraph (f) of this paragraph and of capital market institutions
g2) Services provided by technical service providers that support the provision of payment services, including processing, storing, securing, protecting the confidentiality and validating data, and the supply and maintenance of information technology, communication networks and instruments used for payment services, including authorization transactions, in which the technical service provider does not at any point of the transaction own the funds being transferred
h) Transactions relating to instruments that can be used for the purchase of goods or services only at the premises of the issuer of the payment instrument, within a limited network of service providers, or for a limited range of goods or services, under a commercial agreement with the issuer of the payment instrument
i1) Payment transactions carried out through an information technology or electronic communication device, where the information technology or electronic communication operator does not act only as an intermediary between the payment service user and the supplier of goods or services, and where the goods or services purchased are delivered to and used through the information technology or electronic communication device
i2) Payment transactions made between payment service providers and their agents or branches, in their own name and on their own account
j) Payment services carried out between a parent company and its subsidiaries, or among subsidiaries, in which no payment service provider other than a company belonging to the same group acts as an intermediary
k) Cash withdrawal services through ATMs operated by a service provider that does not provide any of the payment services and is not a party to a framework contract with the customer withdrawing money from the payment account, and that acts on behalf of one or more card issuing institutions
l) Other transactions and services to be determined by the Bank 1 (3) (Amended: 12/11/2019-7192/8 art.) The procedures and principles regarding payment services, the rights and obligations of the parties within the scope of payment services, the information and conditions to be provided in relation to the payment service, and the framework contract shall be determined by a regulation to be issued by the Bank, after obtaining the opinion of the Financial Crimes Investigation Board (MASAK).
(4) (Added: 12/11/2019-7192/8 art.) The Bank is authorized to determine the nature and 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 certain type of transaction within the scope of payment services, and to liberalize them in whole or in part.
(5) (Added: 12/11/2019-7192/8 art.) If the transactions in subparagraphs (b) and (h) of the second paragraph reach a level, in terms of total size and sphere of influence, to be determined by the Bank, the Bank may decide that they are to be considered payment services under this Law.
(6) (Added: 12/11/2019-7192/8 art.) The legal relationships to which payment service providers are party due to their activities subject to this Law are monitored by the Bank. If the Bank determines that there are practices capable of adversely affecting the development of the payments field within the scope of the legal relationships to which payment service providers are party due to their activities subject to this Law, it is authorized to determine the procedures and principles to be complied with regarding those legal relationships.
(7) (Added: 12/11/2019-7192/8 art.) If the Bank determines that there are situations and practices capable of adversely affecting the development of the payments field within the scope of the activities subject to this Law, it is authorized to establish working committees on the matter, to determine the working procedures and principles of these committees by obtaining the opinions of the relevant parties, and to carry out the work and transactions necessary for the decisions taken in these committees to be put into practice.
The details of the relevant law can be accessed at the link below:
https://www.tcmb.gov.tr/wps/wcm/connect/TR/TCMB+TR/Main+Menu/Banka+Hakkinda/Mevzuat/6493/
