2.5 Financial Infrastructure

2.5.1 CBRT Payment Systems Statistics

The payment systems developed and operated by the CBRT are the Interbank Payment System (EFT), the Retail Payment System (RPS), the Electronic Securities Transfer System (ESTS) and the Auction System, along with an instant payment system called the Instant and Continuous Transfer of Funds (FAST).

The total value of transactions conducted on the EFT System and delivery versus payment transactions conducted via the EFT and ESTS, where funds and securities are transferred simultaneously, was TRY 286.29 trillion in 2023. In 2023, the daily average transaction value on the EFT system was TRY 1.13 trillion. Approximately 3.2 million transactions were conducted on the EFT system in 2023 and an average of 12.9 thousand messages were processed daily. The amount of transactions settled through the EFT system was approximately 85% more in 2023 compared to the previous year (Chart 2.5.1.1).

The total value of messages processed via the RPS in 2023 was TRY 165.9 trillion. The daily average value of transactions was TRY 655.74 billion. In 2023, 776.2 million transactions were conducted via the system and the daily average number of messages processed was 3 million. The number of settlements carried out via the RPS in 2023 decreased by 13.6% compared to 2022 (Chart 2.5.1.2). This decline can be attributed to the activation of the FAST System on 8 January 2021, followed by a gradual increase in the transaction limit, which led to a shift in retail payments from the RPS to the FAST System.

The daily average volume of messages processed in the auction system was 857.

The number of participants on the CBRT’s Payment Systems was 62 by the end of 2023.

2.5.2 The Instant and Continuous Transfer of Funds (FAST) System and Statistics of Use

The instant payment system, FAST, was developed by the CBRT and put into effect on 8 January 2021. The FAST system is one of the major endeavors of the CBRT to modernize Türkiye’s payment systems infrastructure to support innovative business solutions. With the FAST System, which operates 24/7, end-to-end transfers of retail payments are completed within seconds, and the parties are instantly notified.

The CBRT raised FAST transaction limits gradually. On 14 February 2023 the transaction limit was increased to TRY 20,000 for payments including also the merchant payments with dynamic verification using TR QR code. On 21 December 2023, it was raised to TRY 50,000, and the limit for merchant payments using dynamic QR codes was increased to TRY 100,000.

The Easy Addressing System (KOLAS) allows money transfers on the FAST System using telephone numbers, ID numbers, e-mail addresses, passport numbers or tax numbers, and without the need to use the International Bank Account Number (IBAN). By 31 December 2023, the number of individual customers of the KOLAS system was 22 million.

The FAST System also allows person-to-person money transfers and merchant payments without necessitating IBAN information by using the TR QR Code created in accordance with the standards.

Thanks to the Security Overlay Service (SIPER), information about the risk of an illegal transaction can be shared between the initiating institution and the receiving institution in all fund transactions, including FAST.

The Request-to-Pay Overlay Service, which allows the payee to request a payment from the payer, was developed and launched as a pilot in December.

All overlay services are important steps that contribute to the smooth, fast and reliable execution of payments and money transfers anytime, anywhere.

In 2023, the total value of messages processed on the FAST System was TRY 8.86 trillion, corresponding to TRY 24.3 billion per day on average. In 2023, the number of transactions conducted via the system was 3.3 billion and the daily average volume of messages processed was 9 million. The highest daily transaction volume for 2023 was recorded on 15 November with 19 million transactions (Chart 2.5.2.2).

The certification process for payment and e-money institutions to participate in the FAST system was successfully completed, with 10 institutions joining the system.

As of 31 December 2023, the System had 36 participants.

2.5.3 Regulations Introduced Pursuant to the Law No. 6493

Amendment of the Payment Services Regulation as well as the Communiqué on Information Systems of Payment and Electronic Money Institutions and Data Sharing Services of Payment Service Providers in the Field of Payment Services

The “Payment Services Regulation, Electronic Money Issuance, and Payment Service Providers (Payment Services Regulation)” and the “Communiqué on Information Systems of Payment and Electronic Money Institutions and Data Sharing Services of Payment Service Providers in the Field of Payment Services” were introduced by the CBRT and published in the Official Gazette No. 31676 dated 1 December 2021. As their provisions became applicable, some amendments were made in the regulation and the communiqué to contribute to the effective, smooth and uninterrupted functioning of institutions, in view of the sector’s needs, consumer complaints, international standards, best practices and other countries’ regulations. These amendments were published in the Official Gazette No. 32332 dated 7 October 2023.

Publication of the Communiqué on Redetermination of Minimum Own Funds Amounts for Payment and Electronic Money Institutions

The first paragraph of Article 33 bearing the title “Minimum own funds’ liability and professional indemnity insurance” of the Payment Services Regulation states that the (minimum own funds) amounts will be re-evaluated by the CBRT in January every year, taking into account the annual changes in the price indices published by TURKSTAT.

In this context, with a Communiqué published in the Official Gazette No. 32087 dated 28 January 2023 and set to enter into force on 30 June 2023, the minimum own funds amounts for payment institutions that exclusively intermediate invoice payments, payment institutions other than those that exclusively provide account information services, and electronic money institutions were set at TRY 7 million, TRY 15 million and TRY 41 million, respectively.

Revision of the Information Guide on the Notification Obligation of Those Excluded from the Scope of the Law Pursuant to Subparagraphs (b) and (h) of the Second Paragraph of Article 12 of the Law No. 6493

A revision was made in the “Information Guide on the Notification Obligation of Those Excluded from the Scope of the Law Pursuant to Subparagraphs (b) and (h) of the Second Paragraph of Article 12 of the Law No. 6493” that was issued in 2022 in the scope of Article 82 of the Payment Services Regulation bearing the title “Notification obligation of those excluded from the scope of the law”.

Studies Regarding the Implementation of TR QR Code Regulation

The CBRT monitored the payment service providers’ process of building the technical infrastructure for TR QR Code transactions pursuant to the Regulation on the Generation and Use of TR QR Code in Payment Services, and carried out studies in coordination with related stakeholders, the BKM in particular, to spread the use of TR QR Code in payments. As a result of the technical development and expansion work, it has become possible to make card payments with TR QR Code at 85% of the existing POS machines and to withdraw money with TR QR Code from almost all ATMs in Türkiye. Meanwhile, the ratio of POS machines, for which the technical preparations for payments with FAST TR QR Code were completed, has reached 80%, and it will be possible to execute FAST transactions with TR QR Code at these POS machines once the contract procedures between payment service providers and merchants are finalized.

On the other hand, there have been some initiatives by payment service providers to enable the execution of cross-border payments (i.e. with one party abroad) also with innovative payment methods such as TR QR Code in addition to traditional payment methods. Studies are being carried out to ensure that the flows and technical steps required to support the related work and enable payment service providers to execute cross-border payments with TR QR Code in an interoperable manner making use of the network effect of the current spread of the TR QR Code are determined jointly with payment service providers under the coordination of the BKM. After these studies are completed, it is planned to prepare a guidance document that the payment service providers can refer to for their cross-border payments with TR QR Code.

Additionally, there are other studies to determine the TR QR Code flows to be used for depositing cash at ATMs and the TR QR Code payment flows through third-party mobile applications. These studies are carried out jointly with payment service providers under the coordination of the BKM to enable the use of TR QR Code payments under a higher number of scenarios. Efforts to finalize and introduce these flows will be carried out in 2024.

Moreover, various actions were specified in 2023 to raise awareness of TR QR Code payments among customers and merchants as well as to improve the payment experience with TR QR Code and broaden the acceptability of TR QR Code payments, FAST TR QR Code payments in particular. The CBRT plans to carry out studies to realize these actions in 2024.

Studies Related to the Open Banking Gateway (GEÇİT) Infrastructure of Data Sharing Services in the Field of Payments (DSSP)

The first paragraph of Article 12 of the Law No. 6493 was amended on 12 November 2019 to include the payment initiation service (subparagraph f) and the service of presenting consolidated information regarding the payment account on online platforms (subparagraph g), so that these services, also called Data Sharing Services in the Field of Payments (DSSP), were defined as payment services within the scope of the Law.

Meanwhile, in view of the conditions and needs of our country, a technical service provider-oriented application architecture was designed to enable a fast integration of stakeholders and an efficient and effective experience of data sharing in the field of payment services. Accordingly, the BKM API (Application Programming Interface) Gateway (GEÇİT), developed by the BKM with entirely domestic human and technical resources, was assigned as a common DSSP infrastructure with the BKM as the technical service provider. The GEÇİT was made operational on 1 December 2022, and banks that successfully completed their tests and technical certifications started to serve as Account Servicing Payment Service Providers (ASPSPs) through the ‘GEÇİT’.² The top ten participants determined by regulations and some leading banks (16 banks in total) have completed their technical certifications, and now serve as ASPSPs through the GEÇİT. In addition to their ASPSP role, banks can also integrate with the system as Authorized Third Party Payment Service Providers (TPPs) if they want, pursuant to first paragraph of Article 13 of the Law No. 6493. On the other hand, unlike other payment service providers, banks do not have to get an operating license from the CBRT as they are subject to the Banking Law No. 5411. Currently, 15 banks serve as TPPs.

If the existing payment institutions and payment and electronic money institutions want to serve as TPPs, they should get a license for expansion of activities in addition to the technical certification of the BKM pursuant to subparagraphs (f) and (g), paragraph one of Article 12 of the Law No. 6493, while other institutions (that are not payment institutions) should get an operating license. Accordingly, four non-bank payment service providers successfully completed their technical certification and license procedures and have integrated with the GEÇİT infrastructure as TPPs. Including the banks that have become TPPs, the number of TPPs has reached 19. On the other hand, procedures for eight other institutions to become TPPs continue. Participants in the production environment (ASPSPs and TPPs) and participants that completed the BKM Technical Certification process have started to be listed on the website built for the DSSP.³

As the CBRT’s top management considered it appropriate to grant additional time for the smooth conclusion of the technical and operational work carried out by the payment and electronic money institutions in view of current developments in the field of financial technologies and payments, the transition period deadline was postponed to 30 September 2023 for the top 10 banks, and to 30 September 2024 for other payment service providers, according to the regulation published in the Official Gazette No. 32332 dated 7 October 2023. Through these regulation amendments in the field of payments, in addition to the revisions in DSSP Transition Period deadlines, the concept of “Digital Wallet” was defined and terms and conditions for the digital wallet service were regulated. Accordingly, the “Adding a Credit Card to the Digital Wallet” flow was included in the DSSP API Principles and Rules (API Standard). Card-issuing institutions that are still connected to the GEÇİT as ASPSPs are expected to transit to this flow by 30 June 2024.

In addition, the DSSP API Standard was upgraded from version 1.0.2 to version 1.1.0 as of 1 December 2023. Accordingly, besides the improvements in the existing functions, Incident Reporting Services and Decoupled Strong Customer Authentication were added to the Standard.

Revision of the Instructions on the Use of Labels

With the Instructions on the “Use of Labels” dated 10 August 2023, the CBRT revised the label format that agents should use in line with the procedures regarding the labels and certificates to be used by agents, with a view to prevent people from conducting transactions with unauthorized agents.

Issue of the Instructions on Fraudulent Acts

To ensure security of the payments area, prevent consumer grievances, and protect the reputation of payment and electronic money institutions, the CBRT issued the “Instructions on Fraudulent Acts” on 1 November 2023 considering it appropriate that institutions review the compliance with all related regulations in various issues, particularly the Law No. 6493 and related secondary regulations, and promptly take necessary actions regarding the issues to be improved.

Issue of the Instruction on the Use of Logos and Trademarks in Collaborations to Be Established in the Scope of Paragraph Three, Article 19 of the Regulation

With the “Instructions on the Use of Logos and Trademarks in Collaborations to Be Established in the Scope of Paragraph Three, Article 19 of the Regulation” dated 18 August 2023, the CBRT revised to the use of logos and trademarks by payment and electronic money institutions and their agents for the type of collaborations covered by Article 19 of the Regulation.

Revision of the Explanatory Guidelines on Administrative Fines Under the Law No. 6493 on Payment and Securities Settlement Systems, Payment Services, and Electronic Money Institutions

To ensure more effective execution of administrative fine procedures, the Explanatory Guidelines on Administrative Fines were revised to include the provisions of the Communiqué on Information Systems of Payment and Electronic Money Institutions and Data Sharing Services of Payment Service Providers in the Field of Payment Services published in the Official Gazette No. 31676 dated 1 December 2021.

² https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Announcements/Press+Releases/2022/ANO2022-48
³ https://bkm.com.tr/urunler-ve-hizmetler/odeme-hizmetleri-veri-paylasim-servisleri/ (in Turkish)

2.5.4 Studies Regarding the Merchant Registration System (MRS)

In order to facilitate the processes related to payment transactions and to prevent fraud and malicious acts in the field of payments, the Merchant Registration System (MRS) was put into use in 2022, allowing a single-center generation and monitoring of a merchant code to be assigned to each merchant that provides goods and services with a payment method that falls within the scope of payment services. Upon the conclusion of the transition process for the Payment Services Regulation, bank and non-bank payment service providers that offer payment services to merchants with a payment method that falls within the scope of payment services have completed their participation in the system. The participation process for payment service providers that are yet to start offering such services is handled by the BKM.

On the other hand, the Data Sharing Services flows were introduced following the studies conducted with the participation of payment service providers under the coordination of the BKM. These studies were initiated in response to the Payment and Electronic Money Institutions Association of Türkiye’s (TÖDEB) MRS-related request from the CBRT asking for the standardization of data sharing among payment service providers in cases where a payment service provider offers the service using the infrastructure of another payment service provider as well as for the conduct of such data sharing over a centralized system. Data Sharing Services flows have been helpful in supporting competitiveness in the sector by limiting and standardizing the data about merchants that particularly the non-bank payment service providers share with banks in cases where they provide payment services using the infrastructures of banks as well as in boosting the efficiency and effectiveness of the process that will enable such data sharing over the MRS.

2.5.5 Licenses Regarding the Activities of Payment and Securities Settlement Systems

Approval of License for Other Activity

• One payment system’s application for license for other activity was approved.

Number of Payment and Securities Settlement Systems Operating in Türkiye

As of 31 December 2023, there were eight payment systems and four securities settlement systems operating in Türkiye pursuant to the Law No. 6493.

2.5.6 Licenses Regarding the Activities of Payment and Electronic Money Institutions

Operating License

• Operating license applications of seven companies were approved and published in the Official Gazette.
• The operating license application of one company was rejected.

Expansion of Activities

• Thirteen institutions’ applications for expansion of activities were approved and published in the Official Gazette.

Transfer of Share

• Eleven applications from nine institutions for transfer of shares were approved, and one application for transfer of shares was rejected.

Suspension of Operating License

• One institution’s operating license was suspended.

Revocation of Operating License

• One institution’s operating license was revoked.

Number of Payment and Electronic Money Institutions Operating in Türkiye

As of 31 December 2023, there were 27 payment institutions and 53 electronic money institutions operating in Türkiye pursuant to the Law No. 6493.

2.5.7 Administrative Sanctions Imposed on Payment and Electronic Money Institutions

Following the oversight and supervision activities carried out at institutions in 2023, five institutions were charged with administrative fines amounting to TRY 1,394,957.00 in total and 12 institutions received a warning pursuant to Article 27 of the Law No. 6493 titled “Violation of regulations and decisions”.