Licence rejection sees PayPal quit Turkey
PayPal is suspending business in Turkey from 6 June as it has failed to get a new licence for its services.
The US company says the decision will affect “tens of thousands of businesses and hundreds of thousands of consumers”.
PayPal did issue two separate statements to TechCrunch. The first was very similar to the Turkish language announcement on the PayPal website in Turkey.
A PayPal spokesperson says: “Effective from 6 June 2016, our customers in Turkey will no longer be able to send or receive funds with PayPal. Customers will still be able to log in to their PayPal accounts and withdraw any balance on their accounts to a Turkish bank account.”
It adds: “We have no choice but to suspend processing payments in Turkey as our application for a Turkish payments license has been denied by the local financial regulator and we have been instructed to suspend our Turkish business operations.”
Asked by TechCrunch why the licence was denied, the spokesperson says it is a result of new rules that “require IT systems to be localised in the country”. PayPal uses global hubs to distribute its IT.
The PayPal spokesperson says. “We respect Turkey’s desire to have information technology infrastructure deployed within its borders, however, PayPal utilises a global payments platform that operates across more than 200 markets, rather than maintaining local payments platforms with dedicated technology infrastructure in any single country.”
The repercussions of PayPal’s exit from Turkey have yet to be felt, but the country has shown it has strong and independent ambitions in the fintech space.
Recently, Turkey introduced its own card payment system, called TROY, and the nation is setting its sights on becoming a cashless society by 2023.