digital wallet era

Digital Wallet Era in Turkey

Pi Legal Consultancy

Introduction

Generally speaking, this article basically seeks to examine the potential impacts of the Digital Wallet Era in Turkey. There is a growing acceptance that Turkey offers business-friendly policies through a deep talent pool and low marketing costs at the border of three continents. Markedly, Banking and Finance ecosystem has been at the heart of investment in the field of finance. Recently, an amendment has been made by the Central Bank of the Republic of Türkiye (CBTR). To sum up, the available paper will clarify the nature of this improvement.

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What is the meaning of FinTech?

It is important to keep in mind that the word “Financial Technologies (FinTech)” describes emerging digital systems based on the modification, advancement, automation and facilitation of payment systems. To clarify, the FinTech clause refers to a wide form of emerging payment models including electronic money institutions, electronic banking payment models, digital banks, online insurance agencies and digital wallets.

What is the main purpose of FinTech?

In short, the main rationale behind FinTech is to accelerate shopping and trade. There are several benefits of alternative virtual payment methods. By virtue of those benefits, as of February 2023, 739 FinTech-centric companies have been formed in Turkey according to recent studies by the Presidency of Republic of Turkey.

What is the news about Digital Wallet Era in Turkey?

Significantly, CBTR introduces a new change in the area of digital banking. To clarify, the Regulation Amending the Regulation on Payment Services and Electronic Money Issuance and Payment Service Providers (hereinafter as the Regulation) was published in the Official Gazette on October 7, 2023.

Accordingly, the Regulation opens a new era in the area of banking and finance law. Digital wallet is defined for the first time by an official source by Turkey.

What is a digital wallet?

In general, digital wallet is recognized to refer to an electronic payment instrument, online service and application storing the information on payment account and|or payment device recognized by the customer concerned. More specifically, a digital wallet entitles the customer to make payments by means of this information.

Who can offer digital wallet service?

Notably, it is critical to underline that the Regulation also describes relevant authorized intuitions. In accordance with the Regulation, payment service providers are granted the power to offer digital wallets.

Conclusion

In the light of the final analysis, new reform on digital wallet will have serious consequences upon the banking sector. To conclude, the definition of “digital wallet” has been formulated for the first time by the Turkish legal framework. As a result, this shift will have a direct influence upon electronic payment ecosystem on the way forward.

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