As the fintech industry grows rapidly in Turkey, obtaining an electronic money license has become a critical step for businesses looking to offer payment services or issue electronic money. This guide provides a detailed overview of the steps, costs, and processes involved in obtaining an electronic money license in Turkey.
What Is an Electronic Money License?
An electronic money license is a regulatory requirement for businesses that issue, manage, or facilitate electronic money transactions. This license ensures compliance with Turkey’s Law No. 6493 on Payment and Securities Settlement Systems, Payment Services, and Electronic Money Institutions, which regulates the payment services and electronic money sector.
By obtaining this license, companies can legally provide services such as:
- Issuing electronic money.
- Managing digital wallets.
- Processing online payments.
Steps to Obtain an Electronic Money License in Turkey
Obtaining an electronic money license involves several steps and interactions with regulatory authorities. Here’s a step-by-step breakdown:
- Incorporate Your Company:
- The company must be incorporated in Turkey as a joint-stock company (Anonim Şirket).
- The company’s Articles of Association must include provisions for offering electronic money services.
- Meet Capital Requirements:
- The minimum paid-in capital for electronic money institutions is 5 million TRY.
- The capital must be fully paid in cash and free from any encumbrances.
- Prepare a Business Plan:
- Submit a detailed business plan outlining your business model, financial forecasts, and compliance strategy.
- Include risk management and data security policies.
- Set Up Necessary Systems:
- Develop secure IT systems to manage electronic money issuance and transactions.
- Ensure compliance with data protection laws, such as KVKK (Turkey’s Personal Data Protection Law).
- Appoint Key Personnel:
- Appoint qualified personnel to critical roles, such as compliance, risk management, and IT security.
- Ensure the management team meets the qualifications required by regulatory authorities.
- Apply to the Central Bank of Turkey (TCMB):
- Submit your application to the Central Bank of the Republic of Turkey (TCMB), the primary regulatory body overseeing electronic money licenses.
- The application must include all required documents, including:
- Articles of Association.
- Business plan.
- Security and risk policies.
- Proof of capital adequacy.
- Compliance Audit:
- Your business will undergo a comprehensive compliance audit by TCMB.
- Auditors will assess your systems, policies, and readiness to operate in the electronic money sector.
- Obtain Approval:
- Once your application is approved, you’ll receive your electronic money license.
- This license allows you to legally operate as an electronic money institution in Turkey.
Costs Associated with Obtaining the License
- Minimum Capital Requirement: 5 million TRY (fully paid in cash).
- Application and Compliance Costs: Depending on your business model, these can range from 50,000 to 100,000 TRY, covering legal fees, consultancy, and regulatory filings.
- Operational Costs: Includes setting up IT systems, hiring key personnel, and maintaining compliance with ongoing regulatory requirements.
Important Considerations During the Process
- Regulatory Compliance:
- Strict adherence to Turkey’s regulatory framework is crucial for approval.
- Ensure robust anti-money laundering (AML) and data protection policies are in place.
- Data Security:
- Develop advanced IT systems to protect consumer data and prevent fraud.
- Compliance with international standards like ISO 27001 may enhance your application’s credibility.
- Timeline:
- The process can take between 6 to 12 months, depending on the completeness of your application and regulatory approval.
- Ongoing Obligations:
- After obtaining the license, you must submit regular reports to TCMB and maintain compliance with applicable laws.
Conclusion
Acquiring an electronic money license in Turkey is a complex but rewarding process. It opens the door to operating legally in one of the fastest-growing fintech markets in the region. By understanding the steps, costs, and regulatory expectations, your business can navigate this process efficiently.
Need Help with Licensing?
At Fintechium, we specialize in guiding businesses through the electronic money licensing process. From preparing your application to ensuring compliance, we provide end-to-end support to help you succeed in Turkey’s fintech ecosystem. Contact us today to get started!