Picture source: Shutterstock. The Cards and Payments Industry in Turkey: Emerging Trends and Opportunities to 2019

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1 Picture source: Shutterstock The Cards and Payments Industry in Turkey: Emerging Trends and Opportunities to 2019 Published Date: May 2015

2 Executive Summary Timetric s 'The Cards and Payments Industry in Turkey: Emerging Trends and Opportunities to 2019' report provides detailed analysis of market trends in Turkey's cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including credit transfers, check payments and payment cards during the review period ( ). The report also analyzes various payment card markets operating in the industry and provides detailed information on the number of cards in circulation, and transaction values and volumes during the review period and over the forecast period ( ). It also offers information on the country's competitive landscape, including market shares of issuers and schemes. The report brings together Timetric s research, modeling, and analysis expertise to allow banks and card issuers to identify segment dynamics and competitive advantages. The report also covers detailed regulatory policies, recent changes in regulatory structure, card fraud statistics, and profiles of card issuers operating in the country. Synopsis Timetric s 'The Cards and Payments Industry in Turkey: Emerging Trends and Opportunities to 2019' report provides top-level market analysis, information and insights into Turkey's cards and payments industry, including: Current and forecast values for each market in Turkey's cards and payments industry, including debit cards and credit cards. It also includes detailed analysis of the prepaid cards market. Detailed insights into payment instruments including credit transfers, check payments and payment cards. It also, includes an overview of the country's key alternative payment instruments. Analysis of various market drivers and regulations governing Turkey's cards and payments industry. Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards. Comprehensive analysis of consumer attitudes and buying preferences for cards. The competitive landscape of Turkey's cards and payments industry. Reasons to buy Make strategic business decisions, using top-level historic and forecast market data, related to Turkey's cards and payments industry and each market within it. Understand the key market trends and growth opportunities in Turkey's cards and payments industry. Assess the competitive dynamics in Turkey's cards and payments industry. Gain insights into marketing strategies used for various card types in Turkey. Gain insights into key regulations governing Turkey's cards and payments industry.

3 1 Payment Instruments 1.1 Current Payments Environment Figure 1: Turkey Payment Instruments Shares by Transaction Value (%), 2010 and Credit transfers Payment cards Checks Credit transfers Payment cards Checks * Payment cards include transactions made at POS terminals only. Note: Please refer to the Appendix for detailed information on the above data points Source: Central Bank of Turkey and Timetric analysis ` Timetric Figure 2: Turkey Payment Instrument Shares by Transaction Volume (%), 2010 and Payment cards Credit transfers Checks * Payment cards include transactions made at POS terminals only Note: Please refer to the Appendix for detailed information on the above data points Source: Central Bank of Turkey and Timetric analysis Payment cards Credit transfers Checks Timetric

4 CAGR ( ) Payment Cards in Circulation by Type (Million) 2 Payment Cards 2.1 Payment Cards Analysis Figure 3: Turkey Growth in Payment Cards Transaction Value and Number of Cards in Circulation by Type, % 6% 5% 4% 3% 2% 1% 0% 0% 2% 4% 6% 8% 10% CAGR ( ) Debit Cards Credit Cards Note: The size of the bubble represents the cards transaction value Note: Please refer to the Appendix for detailed information on the above data points Source: Timetric analysis Timetric

5 Transaction Volume (Million) Transaction Value (US$ Billion) Volume and value of payment card transactions by type Figure 4: Turkey Volume and Value of Payment Card Transactions by Type (%), Debit Cards Credit Cards Debit Cards Credit Cards Note: Please refer to the Appendix for detailed information on the above data points Source: Timetric analysis Timetric

6 2.2 Methodology All Timetric cards and payments reports are created by following a comprehensive, four-stage methodology. This includes market study, research, analysis and quality control. Timetric s dedicated research and analysis teams consist of experienced professionals with background in research, consulting, statistics and economics. Timetric adheres to the Codes of Practice of the Market Research Society ( and the Society of Competitive Intelligence Professionals ( 1) Research A. Sources Collection of the latest market-specific data from a wide variety of industry sources: Central bank statistics Supranational organizations Payment associations Payment schemes/networks Company filings Banking associations Payment regulatory bodies B. Expert opinion Insights from leading experts in the payments industry Analysis of third-party opinion and forecasts: Industry reports central banks and regulators Specialized industry publications C. Data consolidation and verification Consolidation of data and opinion to create historical datasets Creation of models to benchmark data across sectors and regions 2) Analysis A. Market forecasts Feeding forecast data into market models: Macroeconomic indicators Payment industry-specific drivers Analysis of payment industry database to identify trends: Latest trends in cards and payments Key drivers of the insurance industry B. Report writing Analysis of market data and forecasts Identify trends, drivers and challenges in the industry Benchmark key products and companies in the against their competitors 3) Quality Control A. Templates Detailed process manuals

7 Standardized report templates and accompanying style guides Use of in-house developed model for forecasting key payment indicators Multi-layer quality-control procedures B. Quality-control process Peer review Senior-level QC Cross-checks for data integrity Data verification and normalization through comparison of data from multiple sources 4) Exchange Rate Table 1: Annual Average Exchange Rate F 2016F 2017F 2018F 2019F TRY per US$ Source: Timetric analysis Timetric Related Reports Bulgaria s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, strategies, Products and Competitive Landscape The Czech Republic s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, strategies, Products and Competitive Landscape Poland s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, strategies, Products and Competitive Landscape Romania s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, strategies, Products and Competitive Landscape

8 TABLE OF CONTENTS 1 Definitions and Methodology Definitions Methodology Key Facts and Events Executive Summary Payment Instruments Current Payments Environment Alternative Payment Instruments Mobile wallet BKM Express PayPal PayMobile pay PayU iyzi Payments Paymentwall Direct carrier billing Regulations in the Cards and Payments Industry Regulatory Framework Anti-Money Laundering (AML) Foreign Direct Investment (FDI) Regulations Analysis of Cards and Payments Industry Drivers Demographic Drivers Economic Drivers Infrastructure Drivers Business Drivers Market Segmentation and New Product Launches Market Segmentation and Targeting Consumer cards Commercial cards New Product Launches Payment Cards Payment Cards Analysis Volume and value of payment card transactions by type Personal vs commercial cards Debit Cards Debit Cards Market Analysis Debit cards transaction volume and value by channel Debit cards scheme shares in terms of number of cards in circulation and transaction value Debit cards issuers market shares Debit cards comparison Credit Cards... 44

9 10.1 Credit Cards Market Analysis Credit cards transaction volume and value by channel Credit cards scheme shares in terms of number of cards in circulation and transaction value Credit cards issuers market share Credit cards comparison Commercial Cards Commercial Cards Market Analysis Commercial cards comparison Card Fraud Statistics Card Fraud Analysis Card Issuers Yapi ve Kredi Bankasi AS TC Ziraat Bankası AŞ Turkiye İş Bankasi AS Turkiye Garanti Bankasi AS VakifBank Prepaid Cards Prepaid Cards Market Analysis Prepaid cards comparison Merchant Acquiring Merchant Acquiring Market Analysis Appendix Tables Contact Timetric About Timetric Timetric s Services Disclaimer... 76

10 LIST OF FIGURES Figure 1: Turkey Payment Instruments Shares by Transaction Value (%), 2010 and Figure 2: Turkey Payment Instruments Shares by Transaction Volume (%), 2010 and Figure 3: Turkey Total Population and Structure, Figure 4: Turkey Internet and Mobile Penetration (Users per 100 Inhabitants), Figure 5: Turkey Economic Indicators, Figure 6: Turkey Number of ATMs, POS Terminals and Deposit Bank Branches, Figure 7: Turkey Household Final Consumption Expenditure and Retail Sales, Figure 8: Turkey E-Commerce Value (US$ Billion), Figure 9: Turkey Outbound and Inbound Trips Volume and Spending, Figure 10: Turkey Cards and Payments Industry Segmentation by Card Type, Figure 11: Turkey Growth in Payment Cards Transaction Value and Number of Cards in Circulation by Type, Figure 12: Turkey Volume and Value of Payment Card Transactions by Type (%), Figure 13: Turkey Personal and Commercial Cards, Transaction Volume and Value (%), Figure 14: Turkey Growth in Debit Cards Transaction Value and Number of Debit Cards in Circulation, Figure 15: Turkey Debit Cards Transaction Volume and Value by Channel, Figure 16: Turkey Debit Cards Scheme Shares in Terms of Number of Cards in Circulation and Transaction Value (%), Figure 17: Turkey Debit Cards Issuers Market Shares in Terms of Transaction Value (%), Figure 18: Turkey Growth in Credit Cards Transaction Value and Number of Credit Cards in Circulation, Figure 19: Turkey Credit Cards Transaction Volume and Value by Channel, Figure 20: Turkey Credit Cards Scheme Shares in Terms of Number of Cards in Circulation and Transaction Value (%), Figure 21: Turkey Credit Cards Issuers Market Share in Terms of Transaction Value (%), Figure 22: Turkey Credit Cards Issuers Market Share in Terms of Outstanding Balance (%), Figure 23: Turkey Number of Commercial Cards in Circulation and Transaction Value, Figure 24: Turkey Shares of Various Types of Card Fraud in Terms of Transaction Value (%), 2010 and Figure 25: Turkey Number of Prepaid Cards in Circulation and Transaction Value, Figure 26: Turkey Merchant Acquiring Transaction Volume and Value, Figure 27: Turkey Merchant Acquirers Market Share in Terms of Transaction Value %, Figure 28: Turkey Number of Retail Outlets and Total Merchant Accounts (Thousand),

11 LIST OF TABLES Table 1: Key Definitions... 7 Table 2: Annual Average Exchange Rate... 9 Table 3: Turkey Key Facts, Table 4: Regional Benchmarking of Turkish Payment Cards, Table 5: Turkey Mode of Entry of Foreign Banks Table 6: Cards for High-Income Consumers, Table 7: Cards for Travelers, Table 8: Cards for Shoppers, Table 9: Cards for Students and Youth Population, Table 10: Commercial Cards Comparison and Key Features, Table 11: Turkey New Product Launches Table 12: Turkey Pay Now, Average Interchange Fees: Intra-Network Transactions (%), Table 13: Turkey Pay Now, Average Merchant Service Charge: Domestic Transactions (%), Table 14: Turkey Debit Cards Comparison and Key Features, Table 15: Turkey Pay Later, Average Interchange Fees: Intra-Network Transactions (%), Table 16: Turkey Pay Later, Average Merchant Service Charge: Domestic Transactions (%), Table 17: Turkey Gold Credit Cards Comparison and Key Features, Table 18: Turkey Premium Credit Cards Comparison and Key Features, Table 19: Turkey Commercial Cards Comparison and Key Features, Table 20: Turkey Prepaid Cards Comparison and Key Features, Table 21: Turkey Payment Instruments Transaction Value (TRY Billion), Table 22: Turkey Payment Instruments Transaction Value (US$ Billion), Table 23: Turkey Payment Instruments Transaction Volume (Million), Table 24: Turkey Number of Payment Cards in Circulation by Type (Million), Table 25: Turkey Volume of Payment Card Transactions by Type (Million), Table 26: Turkey Value of Payment Card Transactions by Type (TRY Billion), Table 27: Turkey Value of Payment Card Transactions by Type (US$ Billion), Table 28: Turkey Personal and Commercial Cards Transaction Volume (Million), Table 29: Turkey Personal and Commercial Cards Transaction Value (TRY Billion), Table 30: Turkey Personal and Commercial Cards Transaction Value (US$ Billion), Table 31: Turkey Number of Debit Cards in Circulation (Million), Table 32: Turkey Debit Cards Transaction Volume and Frequency by Channel, Table 33: Turkey Debit Cards Total and Average Transaction Value by Channel, Table 34: Turkey Debit Cards Total and Average Transaction Value by Channel, Table 35: Turkey Number of Debit Cards in Circulation By Scheme (Million), Table 36: Turkey Debit Cards Transaction Value By Scheme (TRY Billion), Table 37: Turkey Debit Cards Transaction Value By Scheme (US$ Billion), Table 38: Turkey Debit Cards Transaction Value by Issuer (TRY Billion), Table 39: Turkey Debit Cards Transaction Value by Issuer (US$ Billion), Table 40: Turkey Number of Credit Cards in Circulation (Million), Table 41: Turkey Credit Cards Transaction Volume and Frequency by Channel, Table 42: Turkey Credit Cards Total and Average Transaction Value by Channel, Table 43: Turkey Credit Cards Total and Average Transaction Value by Channel, Table 44: Turkey Number of Credit Cards in Circulation By Scheme (Million), Table 45: Turkey Credit Cards Transaction Value By Scheme (TRY Billion), Table 46: Turkey Credit Cards Transaction Value By Scheme (US$ Billion), Table 47: Turkey Credit Cards Transaction Value By Issuer (TRY Billion), Table 48: Turkey Credit Cards Transaction Value By Issuer (US$ Billion), Table 49: Turkey Credit Cards Balance Outstanding By Issuer (TRY Billion), Table 50: Turkey Credit Cards Balance Outstanding By Issuer (US$ Billion), Table 51: Turkey Number of Commercial Cards in Circulation (Thousand), Table 52: Turkey Commercial Cards Transaction Value (TRY Billion), Table 53: Turkey Commercial Cards Transaction Value (US$ Billion), Table 54: Turkey Card Fraud (TRY Million), Table 55: Turkey Card Fraud (US$ Million), Table 56: Turkey Number of Prepaid Cards in Circulation (Million), Table 57: Turkey Prepaid Cards Transaction Value (TRY Million), Table 58: Turkey Prepaid Cards Transaction Value (US$ Million), Table 59: Turkey Merchant Acquiring Transaction Volume by Card Type (Million), Table 60: Turkey Merchant Acquiring Total Transaction Value (TRY Billion), Table 61: Turkey Merchant Acquiring Total Transaction Value (US$ Billion), Table 62: Turkey Acquirers Transaction Value (TRY Billion), Table 63: Turkey Acquirers Transaction Value (US$ Billion),

12 Table 64: Turkey Retail Outlets and Total Merchant Accounts (Thousand),