Electronic Money and Payment Services Law in Turkey

The rise of electronic money and digital payment systems has led to significant legal developments worldwide, and Turkey is no exception. The Law on Payment and Securities Settlement Systems, Payment Services, and Electronic Money Institutions (Law No. 6493) governs the use of electronic money and payment services in Turkey. This guide explores the legal framework for electronic money and payment services, outlining the responsibilities of providers, consumer rights, and the regulatory oversight provided by the Banking Regulation and Supervision Agency (BRSA) and the Central Bank of Turkey.

1. Law No. 6493:
   Law No. 6493, enacted in 2013 and subsequently updated to align with the EU’s Second Payment Services Directive (PSD2), provides the foundation for the regulation of payment services and electronic money institutions in Turkey. This law regulates the issuance of electronic money and the provision of payment services, ensuring transparency, security, and consumer protection.
2. BRSA Oversight:
   The Banking Regulation and Supervision Agency (BRSA) is the primary regulatory body responsible for overseeing electronic money institutions in Turkey. It grants licenses to electronic money institutions and ensures compliance with financial and technical requirements. The BRSA also monitors anti-money laundering (AML) and counter-terrorism financing (CTF) compliance within the sector.
3. Consumer Protection:
   One of the key elements of Law No. 6493 is the protection of consumers who use electronic money and digital payment services. The law mandates clear communication of terms and conditions, transparency in fees, and the secure handling of consumer data. Dispute resolution mechanisms are also established under this law, ensuring that consumers can resolve issues related to unauthorized transactions or service malfunctions.

1. Electronic Money:
   Electronic money refers to monetary value stored electronically, which can be used for making payments to third parties. It is distinct from traditional bank deposits and is issued by licensed electronic money institutions. In Turkey, electronic money must be denominated in Turkish lira and is fully backed by bank deposits, ensuring that customers can redeem their funds at any time.
2. Payment Service Providers (PSPs):
   PSPs are entities authorized to offer payment services, such as processing transactions, providing payment instruments (e.g., cards, mobile payments), and offering remittance services. In Turkey, PSPs must comply with strict regulations regarding the security and processing of transactions to protect consumers from fraud and cyberattacks.

1. Licensing Requirements:
   Electronic money institutions and payment service providers must obtain a license from the BRSA to operate legally in Turkey. The licensing process requires applicants to meet financial, technical, and operational criteria, including maintaining a minimum capital threshold and demonstrating the ability to manage risks associated with electronic payments.
2. Ongoing Compliance:
   Licensed institutions are subject to ongoing regulatory supervision by the BRSA and must regularly report on their financial health and operational performance. They are also required to implement robust cybersecurity measures to protect sensitive consumer data and prevent fraud.

1. Digital Transformation:
   With the rapid digitalization of financial services, Turkey has introduced new regulations to accommodate emerging technologies such as cryptocurrencies and blockchain-based payment systems. While cryptocurrencies are not yet fully integrated into the legal framework, the BRSA has issued guidelines to clarify their status and ensure consumer protection in the use of these new financial instruments.
2. Increased Consumer Protections:
   In response to the growing use of electronic money and payment services, Turkey has strengthened consumer protection measures. New amendments to the law now require payment service providers to offer additional security features, such as two-factor authentication (2FA) and biometric verification, to reduce the risk of unauthorized access and fraud.

The regulation of electronic money and payment services in Turkey is evolving to keep pace with technological advancements and consumer demands. Law No. 6493, combined with BRSA oversight, provides a solid legal foundation for ensuring the security and transparency of electronic payments. As the use of digital financial services grows, regulatory bodies continue to adapt and refine the legal framework to protect consumers and maintain financial stability.