The Regulation on Payment Services and Electronic Money Issuance and Payment Service Providers by the Central Bank of the Republic of Turkey (CBRT) was published in today’s issue of the Official Gazette.
The regulation regulates the authorization and activities of payment institutions and electronic money institutions, the principles regarding payment service providers, payment services and the issuance of electronic money.
The Regulation has entered into force as of the date of its publication and organizations operating as of this date will be obliged to harmonize with the provisions introduced by this regulation within one year.
With the new regulation, the Regulation on Payment Services and Electronic Money Issuance, Payment Institutions and Electronic Money Institutions published in the Official Gazette dated 27/6/2014 and numbered 29043 was repealed.
Capital requirement for companies issuing electronic money: A paid-in capital requirement of 5 million RY was introduced for companies issuing electronic money. These institutions are required to fulfill the paid-in capital requirement of at least 1 million RY for intermediary services in bill payments, and at least 2 million RY for the services such as the operation of the payment account, money transfer, issuance or acceptance of the payment instrument.
Issuance of the electronic money: The electronic money issuer should issue the electronic money once the funds received without delay. In addition, the funds given to the representative of the electronic money institution in order to provide electronic money will be deemed to have been given to the electronic money institution. Electronic money shall be deemed to have been issued as soon as the payment is made to provide electronic money. Interest cannot be charged for the fund received in return for electronic money, and no benefit will be provided to the customer depending on the period and amount of electronic money kept.
Repayment of electronic money: The electronic money issuer is obliged to carry out the transactions regarding the repayment of the fund equal to the electronic money upon the request of the customer, without delay, and in any case, by the end of the next business day after receiving the request. The repayment will be made in banknotes, coins, deposit money electronic money issued by another institution, according to the customer’s choice.
Operating permits: Applications for operating permits to be made to the CBRT to operate in the field of payment services in Turkey or to issue electronic money will consist of two steps the intelligence review stage and the final approval stage the applications for operating permits to be made to the bank will be hand-delivered to the CBRT headquarters.
Activities that cannot be perfored: In Article 15 of the Regulation, activities that cannot be performed by the institutions are regulated. The institution cannot accept deposits or participation funds, and cannot use the name of the bank in any documents, announcements and advertisements or statements made to the public that may give the impression that it operates like a bank or acts behalf of the bank.
It is necessary to ensure that foreign currency purchase and sale transactions made without being connected to any account receive consecutive or close to sequential transaction numbers with the relevant money transfer or money order, and that the transactions are related to each other and that they are carried out consecutively.
If the institution provides payment services to people who are not considered to be resident in Turkey, foreign currency purchase and sale transactions can only be made, provided that it is related to the payment service. If both parties of the transaction are residing abroad, the institution will not be able to perform the foreign exchange trading provided that one of the parties of the transaction is located abroad and within the conditions specified in the Regulation, the institution will be able to carry out foreign exchange purchase and sell activities.
Additional Equity Requirement
The Central Bank of the Republic of Turkey may impose a condition of holding additional equity for the institution to operate in areas not considered as payment services.
Block
Payment funds protection accounts and electronic money protection accounts will be blocked by the relevant bank in order to compensate the rights of the fund holders and to fulfill the obligations of the institution arising from the Law. The minimum amount of guarantee required to be kept by the institution at the CBRT will be two million Turkish Liras for payment institutions performing the payment service, three million Turkish liras for other payment institutions and five million Turkish liras for electronic money institutions. The base guarantee amount is, minimum for those with less than 50,000 customers, and double for those between 50,000 and 500,000 customers; 3 times more for those between 500,000 and 5 million customers four times mor efor those with more than 5 million customers.