The
Regulation on Payment Services and Issuing Electronic Money and Payment Service
Providers, and the Communiqué on the Management and Supervision of the IT
Systems of Payment and Electronic Money Institutions and the Data Sharing
Services of Payment Service Providers in Payment Services Area entered into
effect after having been promulgated on the Official Journal dated December 1,
2021 and bearing the issue number 31676. Consisting of six sections and looked
forward to being published by the industrial stakeholders, the New Regulation
aims to set out the applicable principles and procedures in authorization and
activities of the payment and electronic money institutions, as well as
provision of payment services and issuance of electronic money.
Drawn up
upon the amendments to the Law on the respective applicable regulations, the
New Regulation covers the provisions on sustaining payment services and
electronic money issuing activities effectively and uninterruptedly, and
supporting development of the payments area, and reinforcement of the corporate
structures of the respective institutions, and the institutions, which are
already licensed, are expected to harmonize with the provisions, as set out
under the New Regulation, during one-year period granted thereunder as the
transitional process. The highlights of the New Regulation are as follows:
The New Regulation
has introduced the requirement to obtain permission from the legal
representative of any minors with respect to the mobile operators in order for
any pre-paid or post-paid line users to procure the payment services. The
post-paid or pre-paid lines will be required to be provided to the customers
closed to any pre-paid transactions, and they will be able to be opened to
mobile transactions only upon the approval to be obtained from the subscribers.
The most critical provision introduced for the institutions intermediating for
bill payments is that in the event that any institution operating under the
scope of intermediation services for bill payments outsources from any other
Payment Service Providers which has executed an agreement with the bill issuing
institutions to make collections for and on behalf of them, no requirement will
be sought for them to have entered into an agreement directly with the bill
issuing institutions.
Stabile
cryptocurrency is defined for the first time under the New Regulation and
referred to as the intangible assets which are issued exactly for the fiduciary
money and distributed via digital networks upon being created virtually. The
New Regulation has, on the other hand, limited the transactions on use of
anonymous pre-paid instruments, and such transactions are itemized thereunder. It
has also set out the requirement on co-working of the payment service providers
and introduced the business registration and code system for the business which
are critical for the industries which are not covered under the Former
Regulation.
The new
procedures on obtainment of operating license have been introduced,
highlighting some changes on the process as compared to the application process
of the already-licensed ones. It has also been set out that in order for the
institutions to carry out the payment services through the agency of a
representative, they are required to have obtained all information and
documentation, as necessary to that end, from the representative, and to have
convinced that the representative does not pose any risk in terms of provision
of the payment services without any problem, in compliance with the applicable
regulations. Another groundbreaking provision introduced thereunder is that the
institutions will be allowed to cooperate with the legal persons situated
abroad in line with their purposes and activities, and that they will be
allowed to provide the payment services to their domestic customers through the
agency of the legal persons situated abroad.
It has been
clearly prescribed under the New Regulation that the institutions may become a
shareholder only to the institutions which issue electronic money, or provide
payment services, or which are exempted from the commercial business ban to the
extent that it does not create any impediment for them to perform and fulfill
their obligations, as prescribed under the applicable regulations. There are
also some changes on outsourcing; namely, the electronic money institutions may
not outsource electronic money issuing activities in any manner whatsoever.
Some
additional provisions have been introduced on equity, and the minimum equity
amounts have been increased. Furthermore, the institutions are now required to
hold a deposit amount at and before the Central Bank of the Republic of Turkey,
and to provide an additional deposit amount depending on the number of
representatives. Another industrial-critical provision is that the payment
funds are now allowed to be yielded with overnight interest at the bank where
the hedge account is held.
As
explained in detail above, the New Regulation has introduced many clear and
extensive provisions for existing payment institutions and newcomers. It is
clearly understood that especially the new provisions on avoidance of any
discriminative practices across the industry on provision of payment account
and infrastructure services among the payment service providers will have an
effect on ensuring that the market will have fair and equitable competition
conditions.
