Tuesday, November 23, 2010

Card payments in Turkey: Market Overview

Turkey is a trend-setter in the card payments space.  Understanding what is happening in Turkey could help us understand our own markets.  

Mr Burak Ilgicioglu is the guest writer, and provides an overview of the market and trends there.  Burak has been working on card payment systems since 1994. He has worked for 4 different banks and 2 different payment processors and still working for a bank as the card payment systems analysis manager in Turkey.  He is married with 2 kids. His main areas of interest are smart cards, contactless systems, Visa & MasterCard systems, networks and regulations. He is the creator of the blog focused on contactless systems : http://contactless-world.com

This is a two-part series.  The first post provides an overview of the market.  The last post provides an overview of the trends in contactless and mobile payments.  Btw, it is sheer coincidence that this series is being published around Thanksgiving.

As a classical start of any article on Turkey, I must say that Turkey is a country of crossroads, a harmony of East and West and a mosaic of cultures. On the political level, Turkey has been struggling to join the European Union for about 50 years. Official negotiations started long ago, but not much progress has been made due to political issues.

Interestingly, when it comes to card payment systems, Turkey has joined the EU so long ago. Turkey is considered in the EU regions of Visa and MasterCard, due to highly sophisticated and big card payment business of Turkey.

Turkey has a highly active card business in terms of figures and technology. It is in the top 3 countries in Europe according to Visa EU and MasterCard Europe, in terms of number of cards.
Undoubtedly, Turkey is a smart card country. EMV was chosen as the national standard and EMV migration started in Turkey in 1999. It’s now one of the most mature countries in terms of EMV compatible POS/ATM terminals and cards. (Excluding debit cards which are all magstripe and online PIN based)

Here is a general outline of the market:
Number of credit cards        : 46.200.000Number of debit cards        : 67.300.000
Number of POS terminals        : 1.800.000
Number of contactless terminals    : 38.000
Number of ATM terminals        : 26.600
Number of contactless cards        : 2.900.000
More detailed stats are available from BKM.

Turkish banks are known to have complicated credit card products mainly based on installment programs. Almost all the electronics, white appliances, flat screen TVs, etc are financed by the credit card installment programs. There are very sophisticated credit card campaign management systems for retail networks. Toll payments for highways can be processed by contactless credit or debit cards.

On the vendors part;
Gemalto is the major player in the card vendor market. AustriaCard, E-Kart (G&D) and Oberthur are the followers.

There are few card personalization offices in Turkey. Plastkart is the exclusive partner of Gemalto –which is also a card manufacturer, Provus and Bilesim are the other personalisation centers. Oberthur was also working on its own personalization bureau, but couldn’t manage and quit from the banking sector in Turkey.

Wincor Nixdorf and NCR are the major providers for ATM terminals while Diebold just started signs of growth.

Note: The views expressed here by Mr Burak Ilgicioglu are purely personal and does not reflect his company's stand or viewpoint.

The last post of this series provides an overview of the trends in contactless and mobile payments.

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