Payments via cell phones might be under guarantee

Erdal Sağlam ISTANBUL - Hürriyet

Turkey’s Central Bank plans integrating money movements via cell phones into the payment systems.AA photo

Turkey’s Central Bank has been working on a draft code aiming to include the mobile communication sector into payment systems. While mobile phone operator companies praise the draft, which would provide a legal guarantee to money movements via cell phones, banks are objecting due to worries about rising competition.

The Central Bank has prepared a plan for a draft code regarding payment and properties agreement systems, payment services, and electronic money institutions. It targets integrating money movements in the mobile communication sector, which are regulated by the Information and Communications Technology Authority (BTK), into the payment systems, as the money movements are enlarging and getting increasingly complicated.

However, the Banking Regulation and Supervision Agency is reportedly analyzing the plan and asking for amendments to the articles that would be to the detriment of the banking system.

With the new plan harmonized with the EU system, mobile phone operator companies and the banks disagree on a dispute over “non-banking payment institutions.” The mobile phone operators want to get involved in non-banking payments as the banks do not want to lose their domination in payment systems. The banks are seeking a mobile payment model, which would be related to them and would not create new rivals against them.

New system to be harmonized with EU

The mobile phone operator companies appreciate the plan because the new system would be harmonized with the system in the European Union. Besides, they urge that a new regulation is needed to establish a non-banking payment system in Turkey like in the EU, where a non-banking payment system works with directives on electronic money and payments. Also, they think that the new system should be applied by regarding Turkey’s internal dynamics in a manner that will be competitive and will ease the entrance of new players into the market.

The plan says it contains “the payments in which the operation’s approval is given by an informatics or electronic communication device and in which the payments are made to an informatics or electronic communication enterprise that is an intermediary between the service user and the service provider.”

Currently, the operations that can be made via mobile phones are depositing money, transactions with bank and credit cards, online shopping with mobile phone numbers, contactless payment, money transfers from phone to phone, and invoice payments.