What is Payment Institution?
A Payment Institution (Ödeme Kuruluşu) is a Turkish non-bank financial institution licensed by the Central Bank of the Republic of Türkiye (TCMB) to provide payment services: payment account operation, payment-initiation services, money remittance, merchant acquiring, and related activities: without holding customer funds long-term as deposits. Established under Law No. 6493 (Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions Law), the Payment Institution framework provides a more accessible regulatory pathway than full banking license while enabling significant payment-services scope.
Regulator: since 1 January 2020, payment and e-money institutions are licensed and supervised by TCMB, not BDDK. Law No. 7192 (Official Gazette 22 November 2019, No. 30956) transferred these powers by amending Law No. 6493; payment institutions now obtain their operating permit from TCMB (Art. 14).
Payment Institution permitted activities under Law 6493 include: (i) cash deposit/withdrawal services to payment accounts; (ii) payment-account operation: opening, maintaining, closing customer payment accounts; (iii) fund transfers: direct debit, credit transfer, standing orders; (iv) card-based payment services: issuing payment cards (debit and prepaid; payment institutions cannot extend credit, Art. 14(4)); (v) merchant acquiring: accepting card and other payment-method transactions on behalf of merchants; (vi) money remittance: without payment-account requirement; (vii) payment-initiation services (PIS): initiating payments from customer accounts at other banks under Open Banking; (viii) account-information services (AIS): aggregating customer account information across banks; and (ix) bill-payment intermediation.
Payment Institution licensing requirements include: minimum paid-in capital under Law 6493 Art. 14: TRY 1M for institutions offering bill-payment intermediation and TRY 2M for others (TRY 5M for e-money institutions under Art. 18; no minimum for account-information-only providers under Art. 14/A), with further capital and own-funds rules set by TCMB regulation; operational infrastructure: IT systems, security architecture, business continuity, customer-service capability; governance framework: fit-and-proper testing for senior management and shareholders, internal-control systems; AML/KYC program coordinated with MASAK requirements; safeguarding arrangements for customer funds (segregation, insolvency-remote structures); and compliance with PSD2-equivalent customer-protection rules (strong customer authentication, transaction-monitoring, dispute resolution).
The Payment Institution license is particularly suited for fintechs focused on: payment-acceptance and acquiring (POS providers, e-commerce checkout, in-app payments); cross-border remittance (Türkiye-to-diaspora and inbound transfers); B2B payment services (corporate cards, expense management, treasury tools); marketplace and platform payouts (e-commerce seller payouts, gig-economy disbursements); and embedded payment services in non-financial platforms.
Distinguishing Payment Institution from related licensed entities: (i) vs. E-Money Institution: PIs cannot store customer value for prolonged periods (funds must be in transit toward defined payment purposes); EMIs are specifically authorized for stored-value issuance; (ii) vs. Bank: PIs cannot accept deposits, extend credit (beyond limited payment-related credit), or offer broader banking services; banks operate full universal-banking scope; (iii) vs. unlicensed fintech: payment services are licensed activities; performing them without license triggers TCMB enforcement and potentially criminal exposure.
Source. Law No. 6493 Arts. 12, 14, 14/A and 18; Law No. 7192 (Official Gazette 22.11.2019, No. 30956).