We discussed the Draft Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions (the “Draft Law“) and Amendments to Certain Laws submitted to the Presidency of the Grand National Assembly of Turkey in our Client Alert dated October 17, 2019.
The Grand National Assembly of Turkey passed a bill regarding the Amendments to the Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions (the “Amendment“) on November 12, 2019. The Law was published in the Official Gazette No. 30956 on November 22, 2019.
The Law will enter into force as of January 1, 2020. The Law introduces major changes to the regulation and supervision of payment services and open banking service providers.
- In accordance with the Amendment, the Central Bank of the Republic of Turkey (the “CBRT“), in lieu of the Banking Regulatory and Supervisory Authority (the “BRSA“), will supervise and regulate e-money and payment service providers. The CBRT will also supervise third parties providing support services to these institutions.
- Certain services which were not deemed to be payment services will qualify as payment services if and when the limits to be determined by the CBRT are reached.
In this respect, the “commercial agent” exemption that the marketplaces have been benefitting from may no longer be available. If the payment transactions intermediated by these marketplaces reach the threshold to be defined by the CBRT, the marketplaces may need to outsource the payment services which are part of the sales of goods and services they are involved in.
Also, payments through closed loop payment instruments (such as gift cards) will be considered payment services and require license if the amount of these transactions reach the limits to be determined by the CBRT.
- The CBRT is now authorized to determine the maximum limits of fees and commissions payable for payment services.
- The Amendment categorizes open banking products of payment initiation service providers (PISP) and account information service providers (AISP) as payment services and includes them in the scope of payment services. Payment service providers are also allowed to provide PISP and AISP services.
- In accordance with the Law, the CBRT is entitled to be a shareholder of payment system operators (ödeme sistemi işleticisi) in order to maintain the continuity of payment services.
- The Amendment assigns the BRSA with the duty to regulate and supervise set off and settlement (takas ve mahsup) transactions to the CBRT.
- Within the scope of the Amendment, the Payment and E-Money Institutions Association of Turkey will be established. Simultaneously, payment and e-money institutions are subject to independent audits.
- The Amendment will increase administrative fines imposed under the Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions.
The Amendment opens the door for a new era in open banking and payment services.
Open Banking and payment services providers are required to apply to the CBRT to obtain the authorization for these services within one year of the entry into force of the Law.
Furthermore, depending on the limits to be set forth by the CBRT, the marketplaces may need to establish their payment service provider subsidiaries or outsource the payment services to third party service providers.