Business Law

A NEW ERA BEGINS IN PAYMENT SERVICES AND ELECTRONIC MONEY EXPORTS

Introduction

“Regulation on Payment Services and Electronic Money Issuance and Payment Service Providers” (“Regulation”) of the Central Bank of the Republic of Turkey (“Central Bank”), entered into force in the Official Gazette dated 1 December 2021 and numbered 31676. In the Regulation, the procedures and principles regarding payment services and electronic money issuance are regulated in detail. In addition, at the point of authorization of payment and electronic money service institutions that want to obtain an operating permit, the application processes have been reconsidered and additional obligations have been brought to the institutions that are currently operating.

How will the application process be for the organizations that want to get an operating permit?

The application for an operating permit, regulated in Article 11 of the Regulation, consists of two steps, the intelligence review stage and the final approval stage. The first point to be noted in the application is that the title of the applicant company must include statements indicating that it is a “payment institution” or “electronic money institution”.

Informative Enquiry Phase

Before the trade name, which is determined in accordance with the Regulation, is registered in the trade registry, companies must deposit the application fee specified in the Regulation and begin the application process by applying to the Central Bank with the application forms. When the application procedures made by the company are completed, a document stating that the application has been made will be given to the applicant companies by the Central Bank. Applicant companies must apply to the Central Bank within 6 months with this document, in order to proceed to the informative enquiry phase. Otherwise, this document will lose its validity and the Central Bank will take steps to remove the expressions showing that it is a “payment institution” or “electronic money institution” from  applicant companies’ trade name.

Once the informative enquiry phase is approved by the Central Bank, a written notification is made to the applicant company regarding the approval and it is required to apply to the Central Bank for the final approval phase within 120 days. If no application is made within 120 days, the company that has been approved for the informative enquiry phase loses this right and will have to apply for an informative enquiry from the very beginning.

Final Approval Phase

After applying to the Central Bank for the final approval phase within the 120-day period specified in the Regulation, firstly, the information and documents submitted in the application will be enquired. After this enquiry, a separate enquiry will be carried out by the Central Bank personnel in terms of the management structure of the applicant company, its personnel, the physical conditions of the office used, its technical equipment and the document and record order. As a result of the evaluations, final approval is given to the companies that are found suitable, and in this way, the operating permit will be granted. However, according to the Regulation, the Central Bank is authorized to issue the operating permit within certain limits, if it is determined that the current customer potential of the applicant company or those holding the control of the applicant company is of a nature that may adversely affect the development of the payments area in terms of total size and area of ​​influence.

Capital Requirement for Operating Permit Application

The amount of paid-in capital of companies that will apply for an operating permit is also clearly stated in the Regulation. Accordingly, companies that will apply to provide the payment services listed in detail in Article 4 of the Regulation must have a paid-in capital of at least 2,000,000,00 TL (2 million TL) free from collusion. In the Regulation, an exception has been made for companies that act as intermediaries for invoice payments, and the collusion-free paid-in capital of these companies is determined to be at least 1,000,000,00 TL (1 million TL).

For companies that will make an application to issue electronic money, it is regulated that their collusion-free paid-in capital will be at least 5,000,000.00 TL (5 million TL).

Special Provisions Have Been Made for Issuance of Electronic Money 

According to the new regulation, institutions issuing electronic money are required to issue electronic money without delay in the amount of funds they receive. In addition, it is regulated in the Regulation that no interest can be charged for the fund received in return for electronic money and that no benefit can be provided to the customer depending on the holding period and amount of the electronic money.

Regarding the repayment of electronic money to the customer, the institutions will be bound by the repayment requests from the customers. The customer’s request for a repayment must be fulfilled by the end of the next business day, at the latest, from the receipt of the request by the institution. In addition, in the contract between institutions and customers, the conditions for the repayment of electronic money should be clearly regulated. In this contract, it is stated in the Regulation that the expiry date of electronic money can be regulated provided that it is not less than one year.

Special Provisions Have Been Made for Institutions Providing Payment Services

It is regulated by Law No. 6493 on Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions (“Law”) that payment institutions can keep payment accounts provided that they are only used for payment transactions while providing payment services. In the Regulation, it is regulated that interest cannot be charged to the payment account kept in accordance with the Law and that the owner of the payment account cannot provide any benefit based on time or amount.

Separate regulations are included in the Regulation for cases where companies providing electronic communication services or electronic communication network services (“electronic communication operators”) offer payment services only as an intermediary, by electronic means. Electronic communications operators; transactions for minors, electronic communication services provided under the subscription agreement, and the form of requests to be received from users within the scope of the service they provide are regulated in detail. Although it is essential that the electronic communications operator directly fulfill these obligations, it can also fulfill its responsibilities through an institution of which it is a representative, provided that these organizations obtain approval from the Information Technologies and Communications Authority.

It should also be noted that institutions that mediate invoice payment are required to enter into contracts with invoice-producing institutions in order to act as an intermediary in the invoice payment service.

 

Ezginaz Çalışır, Attorney At Law

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