Obtaining Operating Licences for Payment Institutions in Turkey
Information systems, which have developed rapidly with the introduction of the Internet into our lives, have radically affected commercial relations and payment methods have become diverse in this context. Turkey has also received its share of these developments. In this article, let’s take a closer look at the regulations introduced by the Turkish legislation and the procedure for payment institutions to obtain an operating license in Turkey.
In Turkey, payment services are regulated by Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions (mostly referred to as the “Law on Payment Services” and will be referred to as the “Law” hereinafter) and the Regulation on Payment Services and Electronic Money Issuance and Payment Service Providers (mostly referred to as the “Regulation on Payment Services” and will be referred to as the “Regulation” hereinafter).
Within the scope of this legislation; “Bank” refers to the Central Bank of the Republic of Turkey; “Agency” refers to the Banking Regulation and Supervision Agency; and “Board” refers to the Banking Regulation and Supervision Agency.
What is the Payment Service?
The definition of payment service is set out in Article 12 of the Law. Accordingly, payment service is defined as
“a) All transactions necessary for the operation of the payment account, including services that allow depositing money into and withdrawing money from the payment account,
b) a direct debit transaction, including one-off ones, involving the transfer of funds from the payment account of the payment service user with the payment service provider, a payment transaction by means of a payment card or similar instrument and a money transfer including a standing order,
c) Issuance or acceptance of the payment instrument,
ç) Money transfer,
d) a payment transaction in which the sender gives consent to the payment transaction through an IT or electronic communication device and the payment is made to an IT or electronic communication operator acting only as an intermediary between the payment service user and the provider of goods or services,
e) Services for intermediation of invoice payments,
f) A payment order initiation service offered at the request of a payment service user in relation to a payment account with another payment service provider,
g) The service of making available on online platforms consolidated information on one or more payment accounts of the payment service user with payment service providers, provided that the consent of the payment service user has been obtained,
ğ) Other transactions and services in the field of payments that reach a level to be determined by the Bank in terms of total size or sphere of influence,”
What is the Payment Service Provider?
In the most general terms, a payment service provider can be defined as a company that enables a business to receive payments from its customers online or physically. Although the Law does not explicitly define what a payment service provider is, Article 13 of the Law defines who may be a payment service provider. Accordingly, within the scope of the Banking Law, banks, electronic money institutions, payment institutions and Post and Telegraph Organization Joint Stock Company are payment service providers.
What are the Conditions to be Fulfilled by Organizations Wishing to Operate as Payment Service Providers?
Organizations expecting to operate as Payment Service Providers must fulfill certain conditions. These conditions can be listed as follows;
“(2) The payment institution must;
a) Established as a joint stock company,
b) The shareholders holding ten percent or more of the capital and those in control shall have the qualifications required for bank founders under Law No. 5411,
c) The share certificates shall be issued against cash and all of them shall be registered,
ç) The paid-in capital in cash and free from any kind of collusion shall be at least one million Turkish Liras for payment institutions providing services listed in subparagraph (e) of the first paragraph of Article 12 of this Law, and at least two million Turkish Liras for other payment institutions,
d) Have the management, sufficient personnel and technical equipment to carry out the transactions under this Law and establish units for complaints and objections,
e) Take the necessary measures regarding the continuity of the activities to be carried out under this Law and the security and confidentiality of funds and information relating to payment service users,
f) It has a transparent and open shareholding structure and organizational chart that will not hinder the supervision of the bank,”
Institutions that meet the aforementioned conditions may operate as payment service providers by obtaining an operating license from the Bank.
What is a Payment Service Provider Operating License?
An operating license is the official approval granted by the competent regulatory authorities for a business to legally operate in a specific sector or field. In Turkey, operating permits for payment service providers and electronic money institutions are issued by the Central Bank of the Republic of Turkey (CBRT). This permit confirms that the relevant business complies with legal regulations, security standards and financial obligations. Without an operating license, providing payment services or electronic money services is against the law and may result in severe penalties.
How to Obtain Payment Service Provider Operating License?
A company that will apply for an operating license must follow the steps below:
Initiation of the Application Process:
First of all, the trade name of the company must include the phrases “payment institution” or “electronic money institution”. Before the trade name is registered with the trade registry, the template notification petition and forms annexed to the Regulation must be submitted to the Bank. The notification petition must be accompanied by the draft articles of association and the application form must be accompanied by a receipt showing that the application fee of 500,000 Turkish Liras and the related legal obligations have been paid.
Intelligence Review Phase:
After the application process is initiated, the Bank shall issue a document confirming that the application has been submitted and give it to the applicant. Within six months following the notification of the document to the applicant, an application must be made to the Bank for the intelligence review stage. The necessary petitions and documents must be prepared and submitted to the Bank. The Bank grants approval if deemed appropriate at the end of the due diligence phase.
Final Approval Stage:
An application for the final approval stage must be submitted to the Bank within 120 days at the latest after the approval of the preliminary review stage. The necessary petitions and documents for the final approval stage should be prepared and submitted to the Bank. The Bank makes the necessary evaluations at the final approval stage and finalizes the application positively or negatively.
Obtaining the Activity Permit:
Upon final approval, an operating license is obtained. The operating license becomes valid after its publication in the Official Gazette. The Bank must be notified within ten days from the date of commencement of the activity.
What Are The Documents Required for Obtaining Payment Service Provider Operating License
The Documents Required To Start the Application Process:
- Annex-11-A, Annex-11-B, Annex-11-C and Annex-11-D notification petition and forms
- Draft articles of association
- Application form
- 500.000 Turkish Lira application fee payment receipt
The Documents Required For the Intelligence Investigation Phase:
- Board of directors’ decision to apply for an activity permit
- Activity program and work plan (Annex-1 and Annex-10)
- The latest independently audited financial statements of the company and a report showing that the capital has been paid
- Declarations of qualified shareholders and controlling shareholders (Annex-2 and Annex-3)
- A copy of the Turkish Trade Registry Gazette in which the articles of association of the company are published
- Statement on the collection of statistical data on fraud activities
- Bankruptcy and concordat certificates and Findeks credit rating of qualified shareholders and controlling shareholders (Annex-4 and Annex-5)
- Criminal record documents (Annex 6)
- SDIF documents (Annex 7)
- List or letter of undertaking indicating privileged shares (Annex-5)
- Tax and premium debt documents and commitment letter (Annex-4, Annex-5)
- Financial status report
- Examples of power of attorney
- Information and documents of board members and general manager
- Notarized copies of identity documents or passports of foreign natural persons
- Intelligence Review Phase Document Checklist (Annex 15)
The Documents Required For Final Approval Stage:
- Independent audit report
- Document on professional liability insurance and guarantee obligations
- Document showing that technical conditions are met
- Office report and photos
- Final Approval Stage Document Checklist (Annex 16)
- Changes affecting the accuracy of the documents submitted during the application or the validity of the information constituting the basis for the issuance of the operating license must be notified to the Bank without delay. The Bank may request additional information and documents if deemed necessary.
What Are The Additional Documents for Companies Established Abroad To Acquire Operating Licence For Payment Service Providers In Turkey?
The additional documents that should be presented by the companies established abroad to the Bank in order to obtain operation warrant for payment service providers are listed as below:
- Example of a decision to operate in Turkey.
- Consolidated independent audit report.
- Document indicating that its activities are not prohibited or restricted.
- Articles of association, organizational structure and rating reports.
How Can We Assist You?
If you are planning to operate as a payment service provider in Turkey, we are here to guide you with our experienced commercial law attorneys and complete your application process smoothly. As Viridis Legal Partners, we are at your side at every stage of your application with our experienced attorneys who are familiar with Turkish legislation. We offer legal support to overcome all legal and bureaucratic difficulties you may encounter during the application process. For both local and foreign organizations, we provide support with our expert team in compliance with the legislation, preparation of application documents and communication with institutions. Operating as a payment service provider in Turkey requires a detailed and complex process. We can provide you with the legal advice you need to obtain an operating license and move forward in the sector with confidence.
Contact us now to get detailed information and benefit from our services.
FAQs (Frequently Asked Questions)
What steps should be followed to obtain a payment services license?
To obtain a payment services license, your company’s trade name must include the phrases “payment institution” or “electronic money institution.” The application process, intelligence review, and final approval stages must be completed. All necessary documents and forms should be prepared and submitted to the Bank.
What is an electronic money institution?
Electronic money institutions are legal entities authorized to issue electronic money. These institutions allow users to store money electronically and perform payment transactions without using traditional payment methods.
What are the requirements to become a payment service provider?
To become a payment service provider, you must be established as a joint-stock company, have sufficient capital, and possess the necessary technical equipment and personnel. Additionally, measures must be taken to ensure the continuity of activities and the security of user information.
