GENERAL REMARKS AND EXPLANATIONS
Although the definition of electronic money has been made by various domestic legal legislations and the European Union, there has been no definition covering the present day in the recent history. Fortunately, in the Article 3/1-r, with the title of “Definitions and Abbreviations” of the “Communique on the Information Systems of Payment Services and Electronic Money Institutions and Data Sharing Systems of the Payment Service Providers Regarding Payment Services” (“Communique”) published in the Official Gazette dated December 1, 2021, the definition of electronic money is provided. Therefore, “electronic money is the monetary value accepted by the electronic money issuing organization, issued in exchange for funds, stored electronically, used to perform payment transactions defined in the law. It is a monetary value that is used to perform payment transactions defined in the law and is also accepted as a means of payment by individuals and legal entities other than the organization issuing electronic money.” In the light of the abovementioned information, it is possible to define electronic money as a monetary value, which has the possibility of being stored electronically, constituting material value and storing coins or paper currency function electronically.
In addition to the Communique, amendments were also introduced on the “Regulation on Payment Services and Payment Service Providers with Electronic Money Issuance” (“Regulation”), dated December 1, 2021.
AMENDMENTS INTRODUCED BY THE COMMUNIQUE AND THE REGULATION
- A capital requirement of 5 million Turkish Liras (“TL”) paid to electronic money issuers is an arrangement that is introduced with the Regulation. Additionally, according to the Article 11 of the Regulation, titled “Official Authorization”, there should be a minimum paid-in capital requirement of 1 million TL for the provision of services for the intermediation of invoice payments and 2 million TL for the provision of services such as the operation of a payment account, money transfer, remittance, issuance, or acceptance of a payment instrument for the aforementioned organizations.
- Article 11 of the regulation states that “The title of the company applying for activity must include the phrases indicating that it is a payment institution or an electronic money institution.”. Applications to the Central Bank of the Republic of Turkey (“CBRT”) will be made in two stages: “intelligence review stage” and the “final approval stage”.
- According to Article 16 of the Regulation, the organization may not issue loans and may not engage in advertising and marketing activities in such a way as to create the impression that it is providing loans. Amounts whose payment is mediated cannot be paid in installments. In the seventh paragraph of the Article 15 of the Regulation, it is regulated that the organization cannot accept deposits or participation funds, use the bank’s name or statements that give the impression that it is operating as a bank or making transactions on behalf of the bank in all kinds of documents, advertisements or public statements. The foreign exchange buying and selling process is conditioned in two separate ways according to the presence of the parties in Turkey and abroad. If both parties are based in Turkey, they will not be able to make currency exchange transactions related to payment transactions used by payment service providers. If one of the parties is located abroad, it is possible to trade foreign currency within the conditions specified in the Regulation (Article 15/4).
- Article 15 of the Regulation states that “The bank may impose an obligation on the organization to hold additional equity resources in order to operate in areas that are not considered payment services under the Law in accordance with this article”. Article 36 of the Regulation regulates payment funds protection accounts and electronic money protection accounts under the heading “blocking of protection accounts and guarantees”, compensation of the rights of fund holders and the possibility of blocking by the relevant bank to ensure the fulfillment of the organization’s obligations arising from the relevant law. In the same article, the CBRT has regulated the obligation to have a guarantee in accordance with the service provided in separate paragraphs based on the number of customers.
- In Article 5, titled “Issuance of electronic money”, it is stipulated that the electronic money issuer will issue electronic money in the amount of the funds received without delay, and the funds given to the representative of the electronic money institution in order to obtain electronic money will be deemed to have been given to the electronic money institution.
- Accordingly, interest for the fund received in exchange for electronic money will not be operable and the client will not be provided with any benefits related to the period and amount for which electronic money is held. In addition, the electronic money issuer will be obliged to make transactions related to the repayment of the fund up to the equivalent of the electronic money at the request of the customer no later than the end of the next business day after receiving the request. (Article 6).
- According to the Article 5 of the Regulation, in the implementation of the Regulation, electronic money will be considered to have been issued at the time of payment to provide electronic money.
The full text of the Regulation can be accessed here.
The full text of the Communique can be accessed here.
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Sena ÖRTLEK & S. Betül DEMİREL
Uçar Law & Consultancy Office