by Alper Akcan
August 22, 2016

Characteristics of the payment market in Turkey shows: Payment systems that concern daily life set the basis of big innovations in areas such as retail, food and transportation are paving the road for outstanding developments

Radical developments in the field of technology bring digital transformation in almost all sectors. Indeed, finance technologies also go through this revolutionary transformation. Especially the drastic changes in payment systems have reached to an utmost level.

Payment systems also open new paths to other sectors in order to provide faster, easier and safer services for the sake of complying with technology and the changing consumer behavior. Payment systems that concern daily life set the basis of big innovations in areas such as retail, food and transportation. It is remarkable that the number of new initiatives increases in the field of financial technologies especially in the USA and in Europe and that major investments are made in new payment systems.

Significant developments are made in payment systems in Turkey, which is one of the major actors in the region in this respect. Here is up-to-date information regarding the payment market in Turkey, a nation that carries on its active role in the global market:

Turkey grows by 20 percent annually in the field of FinTech

Between 2012 and 2016, 42.6 million dollar investments were made only in FinTech initiatives in Turkey. This enabled Turkey to grow by 20 percent annually in the field of financial technologies. Especially the recent development of new solutions in payment systems enabled the significant growth of investments in this field.

Digital payments constitute the largest segment of the payment market in Turkey. Digital payments that currently have around 17.5 billion dollar trading size started to rapidly grow especially in 2015. Internet payments that rapidly gained acceleration in 2016 reached to 4.9 billion TL card payment in February 2016. When compared with the same period of 2015, it is understood that card payments over Internet have increased by 32 percent. Besides, it is estimated that 42.8 million people will use digital payment methods in Turkish market by 2020.

With the entry of electronic money and payment institutions to the ecosystem in Turkey, it is expected that the development process of payment systems will rapidly increase in the following periods. Considering that nearly 25 million people are already using banking services, a noteworthy growth is aimed to be achieved in the market by offering new financial solutions to these masses.

The Turkish e-commerce sector is estimated to reach 20 billion dollar size by the end of 2016

It is known that especially the e-commerce sector has a significant impact on the payment market in Turkey which is estimated to reach 20 billion dollar size by the end of 2016. Considering that e-commerce has a great potential in Turkey with 2 percent share in the total retail market with 24.7 billion Turkish Lira (TL), it is possible to consider that there will be major developments in payment systems in the upcoming periods.

Current solutions that are offered in the field of digital payment services are intensively used in e-commerce expenditure in Turkey. There were a considerable number of people who had doubts about the reliability of e-commerce shopping in the past years. Yet, with the decrease in the number of people who have such concerns and the proliferation of Internet, the number of e-commerce users in Turkey exceeded 10 million. It would not be incorrect to state that the number of potential users who will prefer online payments in near future will be very high in Turkey that has a population of nearly 80 million.

Payment options that are offered to eradicate the concerns of e-commerce website users and to reach more people have an important role in this. Especially the infrastructure of banks and the development of new financial products have paved the way of e-commerce companies in Turkey to have the opportunity of choice.

Credit card payment is one of the most preferred methods in online shopping in Turkey

It is announced that card payments over Internet have increased by 25 percent in the first quarter of 2016. Looking at credit card usage rates, credit card payment is one of the most preferred methods in online shopping in Turkey that has a leading position in Europe.

It is known that 90 percent of online payments are made by credit cards while 2 percent are made by debit and pre-paid cards. Data also show that the total number of credit cards has reached 171 million and the monthly payment amounts made with these cards are 48 billion TL. Moreover, reports from 2016 show that daily transaction amounts made with credit cards in Turkey exceeds 1.5 billion TL.

The biggest growth in card payments was seen in the insurance sector by 34 percent and card payment method was observed in market shopping at most. Reviewing all sectors, it is observed that the sector which has the greatest share in card payments is market shopping which is followed by oil with 8 percent, clothing with 7.4 percent and electronic sectors with 6.3 percent shares. 73 percent of people who use card payment methods for online shopping prefer to pay all at once without installments.

The usage of mobile payment methods increased in recent years

The usage rate of mobile payment methods that provide payment opportunities in any place that has mobile networks such as Near Field Communication (NFC), qr code, RFID, SMS gradually increased in recent years. The volume of transactions conducted with mobile payment systems generally around the world reaches up to 240 billion dollar annually. It is estimated that this volume will reach up to 670 billion dollars by the end of 2017. Looking at the global mobile payment system markets, it is seen that banks are leaders in this sphere.

On the other hand, many companies including Google and Turkcell of Turkey have made significant investments in digital wallet option.

In Turkey, payment via credit card will pave the way for new developments in many sectors

New technologies that will have a place in our lives in near future along with the mainstream payment methods will lead great changes in Turkey. Methods that Turkey may easily adapt to such as mobile payments with wearable technologies, payment via credit card readers will pave the way for new developments in many sectors.

User habits that tend to change in light of technological innovations will also create new opportunities in payment systems. Methods that currently enable reliable and practical payment options enable companies to provide more innovative services to their customers while creating customer loyalty. Wirecard, one of the greatest payment infrastructures of Europe with more than 24 thousand member businesses ease the lives of users and member businesses by providing many innovations.