A Payment Institution (Ödeme Kuruluşu) is a Turkish BDDK-licensed non-bank financial institution authorized 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.
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, prepaid; credit cards require additional licensing); (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; and (viii) account-information services (AIS) — aggregating customer account information across banks.
Payment Institution licensing requirements include: minimum capital TRY 1M (substantially below E-Money Institution’s TRY 5M or full bank capital); 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 — examples: iyzico [acquired by PayU], Param, Vepara); 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 BDDK enforcement and potentially criminal exposure. Vircon Legal advises Turkish fintech founders on Payment Institution licensing strategy — license-tier analysis (PI vs. EMI vs. bank), BDDK application preparation, ongoing-compliance program design, and the integration of Payment Institution operations with broader fintech product and partnership strategy.