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A comprehensive overview of the credit cards, payments and consumer banking market in Turkey, with clearsighted commentary backed by relevant data.
Normally a credit card business wouldn't work with the caps on interest rate margin set by the authorities, but issuers are compensated through interchange in what is a unique and ambitious ecosystem.
Domestic network Troy has been steadily growing market share. Contactless too is growing rapidly, with use spiking as viral awareness took hold during the pandemic.
Debit card spend at the point of sale grew fivefold in the seven years before 2020, although credit card APRs and interchange are at historically low levels.
Why credit cards have been so popular in Turkey.
How domestic network Troy is impacting the Turkish market.
Which competitive advantages issuers have created.
How regulators are so pivotal to the Turkish credit card market.
What low rollover rates mean for profitability.
TABLE OF CONTENTS
Demographics and the economy
Turkish cards market
Key retail banks and issuers
Acquiring and processing
Regulatory and other cards market information
Appendices: Card Payments Data
Appendix I: Demographics and the economy
Appendix II: Payments environment
Appendix III: Cards market
Appendix IV: Profit pool
Appendix V: The card networks
Appendix VI: Key retail banks and issuers
Appendix VII: Acquiring and processing
Appendix VIII: Online acquiring
Demographics and Economy
The country has the youngest population in Europe (with the median age standing at 32 years in 2018), largely due to high birth rates and fertility rates in the country.
The payments environment in Turkey is very progressive and the country has ambitions to be a cashless society by 2023. While the complete removal of cash is, in reality, a remote possibility in that timeframe, there have been significant strides, particularly in digital and online banking.
As of year-end 2019, there were 236 million payment cards in Turkey, making the country, after Russia, the largest card payment market in Europe. Germany has a similar number of people – but has 68 million fewer cards.
With over 77.5 million mobile phone users in the country and mobile phone ownership reaching a penetration level of 97.1%, Turkey is an attractive market for mobile payments.
Revenue streams of credit card issuers in Turkey are heavily influenced by regulation. Interest rates, minimum payments and interchange are all limited or set by authorities and reviewed periodically.
At the end of 2019 Visa and Mastercard held a combined 99% share of total credit cards in issue. The Turkish debit cards market consists mainly of Visa Electron and Maestro/ Mastercard-branded cards. Domestic private-label cards are insignificant.
Key Retail Banks and Issuers
The Turkish credit cards market is highly competitive with five firms – Yap Kredi, Garanti Bank, Isbank, Akbank and QNB Finansbank – collectively representing 65% of total credit card issuance. Over 20 banks compete for the remainder of the cards market.
Acquiring and Processing
Merchant acquiring in Turkey is dominated by the biggest four banks: Yap Kredi, Garanti Bank, Isbank and Akbank. This quartet collectively processed around 70 % of credit card billed volume.
With a turnover of around $11 billion in 2018, Turkey is one of the fastest-growing e-commerce markets in the world. There are approximately 20,000 e-commerce websites operating in the country.
Regulatory and Markets Information
The Banking Regulation and Supervision Agency (BDDK) is the sole regulatory and supervisory authority for banks in Turkey. The BDDK was established in 1999, with sweeping legislation six years later regulating the activities of three types of banks: deposit banks, participation banks, and development and investment banks.
Banco Bilbao Vizcaya Argentaria
Banking Regulation and Supervision Agency
Commercial Bank of Qatar
Fincube Incubation Center
Finnish Online Banking
Garanti Payment Systems
Interbank Card Center
Mastercard Payment Transaction Services Turkey
National Bank of Greece
SEPA Direct Debit
Turk Ekonomi Bankas
Reports include detailed market and competitor intelligence on payments cards, e-money, acquiring, retail banking, and consumer credit in Europe. Analysts use primary and secondary source data and conduct in-depth interviews with senior industry executives and finance experts.
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