What Are Payment Institutions? The Cornerstones of E-Commerce: Intermediary Institutions, Electronic Money, and the Difference Between Payment Systems
In the e-commerce ecosystem, payment institutions act as alternative financial intermediaries to banks. These institutions serve as a bridge between the buyer and seller in online payments and facilitate money transfers.
Electronic money institutions have the authority to issue digital money (such as prepaid balances or e-wallet balances) against the funds they collect. In short, while electronic money institutions can convert and hold customers' deposited money as electronic value, payment institutions act as intermediaries for transferring existing money without issuing e-money.
On the other hand, the term payment systems encompasses all infrastructures where payment transactions take place. Payment systems are the technological and financial networks that enable various methods ranging from bank transfers and card payments to mobile wallets and international money transfers.
Within these networks, payment and electronic money institutions play critical roles alongside banks. Ultimately, intermediary payment institutions (PSPs), the concept of electronic money, and payment systems are complementary yet technically distinct concepts: payment institutions are transaction intermediaries, electronic money is digital currency, and payment systems are the infrastructures where these transactions occur.
The Place of Payment Infrastructures in the Digital Economy
Strong and reliable payment infrastructures are essential for the healthy functioning of the digital economy. Systems that enable us to make payments within seconds when purchasing goods or services online have become the cornerstones of the digital economy.
Payment infrastructures allow e-commerce businesses to sell globally and individuals to shop remotely with confidence. For example, when shopping online with a credit card, the transaction completes in a few seconds behind the scenes; this speed and security are thanks to the evolving payment systems over the years.
Without reliable payment systems in the digital economy, neither sellers nor buyers would trust the process, severely limiting the scale and speed of commerce. The card networks, mobile payment applications, e-wallets, and bank transfer systems we use today function like the circulatory system that gives life to the digital economy.
Payment infrastructures also promote a registered economy by encouraging cashless transactions and facilitate the monetization of digital services. In summary, the growth and sustainability of the digital economy directly depend on the effectiveness and prevalence of the payment infrastructures working behind the scenes.
Advantages for SMEs and Individual Users
Strong payment systems and intermediary institutions offer many advantages for SMEs (small and medium-sized enterprises) and individual users. Firstly, small businesses can receive online payments from customers and sell without geographic barriers.
A payment institution providing virtual POS services allows SMEs to accept credit card payments without needing separate agreements with each bank. This significantly reduces technical integration processes and costs.
SMEs can collect payments quickly and with reasonable commission rates via payment institutions, thereby improving their cash flow. Many payment platforms transfer payments to businesses the next day or within short intervals, accelerating the financial cycle of SMEs.
For individual users, the advantages are also clear. Online shoppers can complete payments using their preferred methods thanks to integrated options such as credit cards, debit cards, digital wallets, or bank transfers/EFT.
Especially users with limited access to banking services or without credit cards can participate in e-commerce through prepaid cards and digital wallets offered by electronic money institutions. This also enhances financial inclusion.
In summary, developments in payment systems empower SMEs to access new markets and increase competitiveness, while providing individuals with secure, fast, and easy shopping experiences, making e-commerce accessible to all.
Payment Institutions in Turkey: The Rise of Domestic Systems
PayTR, iyzico, Param: Domestic Payment Solutions for E-Commerce
Along with the development of e-commerce in Turkey, many domestic fintech payment institutions have also written success stories. Among these, companies like PayTR, iyzico, and Param have become popular solutions for businesses wanting to receive online payments.
PayTR is one of the pioneering local payment institutions operating since the early 2010s, providing virtual POS services to thousands of e-commerce sites. Thanks to its competitive commission rates and transaction speeds, it is frequently preferred by SMEs.
iyzico is another successful example that was founded with a startup spirit and grew rapidly. It gained recognition with its easy-to-integrate APIs that allow payment acceptance with just a few lines of code and its installment sales options.
In 2019, iyzico was acquired by the global company PayU but continues to operate under its own brand in the local market, maintaining the trust of sellers and buyers in Turkey.
The Param brand also stands out as one of Turkey’s first licensed electronic money institutions. Param provides virtual POS services to e-commerce companies under the ParamPOS name while also reaching individual users with prepaid cards and digital wallet products.
These domestic solutions filled the gap left by global players like PayPal withdrawing from the Turkish market, meeting the payment needs of e-commerce businesses. Local payment institutions offer a seamless experience for both sellers and customers thanks to advantages such as working with Turkish Lira, Turkish language support, and compliance with local regulations.
Garanti BBVA, QNB Finansbank, Asseco: Bank-Supported Systems
Not only fintech startups but also traditional banks and major technology companies play significant roles in e-commerce payment systems.
Large banks such as Garanti BBVA and QNB Finansbank have been providing virtual POS services with their merchant networks for many years, enabling businesses to collect payments via credit cards.
These bank-provided virtual POS infrastructures are especially preferred by companies with high sales volumes or corporate scale. For example, an e-commerce site integrated with Garanti BBVA’s virtual POS gains the advantage of offering installments on popular credit cards such as Bonus, World, and Axess.
While bank-based payment systems are preferred for financial security and established operational processes, integration requirements and conditions can sometimes be challenging for small businesses.
Large technology providers also play a role here. For instance, international software company Asseco offers a payment platform under the Payten/Paratika brand in Turkey.
Paratika enables businesses to access multiple banks’ virtual POS systems through a single integration, providing multi-bank infrastructure. These systems developed by Asseco in close collaboration with banks can be considered bank-supported fintech solutions.
In conclusion, in Turkey’s e-commerce payments, banks offer their own systems directly while fintech platforms supported or partnered with banks have also found their place in the market.
Large-scale retailers generally prefer direct bank virtual POS systems or broad platforms like Paratika, whereas SMEs seeking more flexible solutions tend to turn to fintech-focused firms.
Electronic Money Institutions and the Wallet Era
Various payment methods used in e-commerce sites
Papara, ininal, Tosla, Paycell, BiP Para: Turkey's Digital Wallet Ecosystem
In recent years, digital wallet applications and electronic money institutions in Turkey have ushered in a new era. Brands like Papara, ininal, Tosla, Paycell, and BiP Para offer users digital wallet services that enable them to hold, transfer, and spend money without needing a bank account.
These applications are operated by electronic money institutions licensed by the Banking Regulation and Supervision Agency (BDDK) and the Central Bank of Turkey (TCMB), each reaching millions of users with their unique features. Papara, founded in 2016, is a rapidly growing digital wallet with a user-friendly interface and wide usage.
Papara account holders can shop in stores using their special Papara card or safely make online payments. Ininal is known as one of Turkey’s oldest prepaid card initiatives; ininal cards, which can even be purchased in supermarkets, primarily serve young people unfamiliar with banking and those without bank accounts.
Tosla, a subsidiary of a private bank (Akbank), stands out with its entertaining content and social peer-to-peer money transfer features aimed at young users. Paycell started as Turkcell’s payment platform and grew with operator-based functions such as payments charged to mobile phone bills and sending gift credits; it later evolved into an independent digital wallet accessible to users of various operators.
BiP Para was integrated into Turkcell’s BiP messaging app, enabling users to transfer money to each other via chat. All these digital wallets created a wave of innovation in the Turkish fintech ecosystem, appealing particularly to young and tech-savvy demographics.
The common point for users is the ability to open and use accounts quickly via mobile apps in just a few minutes, simplifying daily financial transactions.
Which Sectors Prefer Which Payment Systems?
The diversity in payment systems has led to different preferences depending on the sector. Retail e-commerce (such as online stores selling clothing, electronics, and home goods) most commonly supports credit and debit card payments; in these sectors, virtual POS solutions offering easy integration like iyzico and PayTR are frequently used.
Installment sales options are critical in high-priced products such as electronics and white goods, making payment institutions partnered with multiple banks prominent in these areas. In digital content and gaming sectors, which target younger customers, alternative payment methods stand out more.
For example, game platforms and in-app purchases often offer mobile payments (via operator billing) or digital wallets like Papara and Paycell as payment options. Young users without credit cards can still make these payments via mobile lines or prepaid wallets.
In the service sector (such as airline tickets, hotel reservations, and bill payments), security is prioritized, so 3D Secure-enabled card payments and payment intermediaries with strong security infrastructure are preferred.
Additionally, in fields like travel and accommodation involving high-value transactions, international card acceptance is important, so solutions compatible with Visa/Mastercard networks are valuable. Digital platforms operating subscription models (like streaming or software services) prefer payment providers capable of securely storing card information and complying with PCI-DSS for automated recurring payments.
While some traditional sectors still offer cash on delivery or bank transfer methods, digital payment usage is increasing even in these areas as e-commerce volume grows. In summary, each sector chooses payment systems best suited to its customer profiles and transaction characteristics; the key is offering customers the easiest and most secure payment methods.
User Convenience and Young User Profile
Digital wallets offered by electronic money institutions provide significant conveniences compared to traditional banking. Firstly, registration is very quick and practical: typically, an account can be opened within minutes with just a few identity details and a phone number.
The young user profile especially favors these instant digital solutions over lengthy bank branch procedures. Wallet apps offer 24/7 service, providing the flexibility that young people need.
For example, when a group of friends pays a bill at a restaurant, one person can pay the entire amount, and others can send their shares instantly via the mobile wallet app. Such usage scenarios make digital wallets an indispensable tool in young people’s social lives.
Additionally, platforms like Papara and Tosla attract user interest by offering cashback or points for purchases from certain brands. Young users not only use these wallets for payments but also for buying game codes, subscribing to digital platforms, or sharing expenses with friends.
Another convenience is that wallets usually have no account maintenance or EFT fees, allowing students or users with irregular income to conduct financial transactions with peace of mind. In short, electronic wallets have gained an important place in the financial habits of the young generation due to their user-friendly interfaces, low costs, and features integrated into daily life.
Examples of Instant Money Transfers via Mobile Apps
One of the most appreciated features of digital wallets is instant money transfer. Users can send money to a contact in their phonebook without dealing with IBAN numbers, as in traditional banking.
For example, Papara users can instantly transfer money 24/7 by selecting the recipient’s phone number or Papara username. The transfer is credited to the recipient’s account within seconds with no working hour restrictions.
Paycell has long offered similar convenience to Turkcell users; sending money to a Turkcell subscriber with just a phone number is possible, and the amount is instantly added to the recipient’s Paycell balance.
Tosla popularized features such as “Tosla Shake,” where users can send money by bringing phones close together or scanning a QR code. The underlying infrastructure uses fast APIs and real-time transaction engines, ensuring a smooth user experience.
Another example of instant transfers is seen in bill or shopping payments: for instance, a customer choosing Papara as a payment option on an e-commerce site can approve the payment instantly through the Papara app on their phone, completing the payment in seconds.
This process can even be faster than traditional card entry procedures. The popularity of instant transfers also influenced the Central Bank of Turkey to launch FAST, a 24/7 instant interbank transfer system.
In conclusion, electronic money applications have changed user habits in sending and receiving money within their ecosystems by offering instant and easy transfer examples and raising standards in speed.
Payment System Operators in Turkey: Who Runs the Infrastructure?
BKM: The Center of Card Systems
One of the most important institutions behind card payments in Turkey is BKM (Interbank Card Center). Founded in 1990 as a joint venture of banks, BKM ensures that all credit and debit card transactions in Turkey run through a centralized infrastructure.
When a card payment is made in a store or online and the payer and payee banks are different, BKM’s transaction switch system connects the relevant banks. In short, BKM acts as a backbone connecting the card and POS systems of different banks.
Additionally, BKM developed Troy, a national card scheme, enabling Turkey to have its own domestic card brand since 2016. Cards with the Troy logo can be used domestically on the BKM infrastructure, providing a local alternative to Visa/Mastercard.
BKM has also innovated in the sector by offering digital wallet applications like BKM Express in the past (though the project was later discontinued, it inspired private sector developments).
In summary, BKM provides security, speed, and standards to the card payment ecosystem. Millions of card transactions are processed smoothly every day through BKM’s centralized clearing and settlement processes, making card payments simple and reliable for both consumers and merchants.
TCMB FAST: Technical Structure of Instant Payment System
Although the traditional interbank EFT system has long handled transfers, the FAST (Instant and Continuous Funds Transfer) system launched in 2021 opened a new era for payments in Turkey. Operated by the Central Bank of the Republic of Turkey (TCMB), FAST is a payment system allowing instant fund transfers 24/7.
Technically, FAST is designed to deliver payment messages to the recipient bank within seconds and complete the transaction, eliminating the delays and working hour restrictions of the old EFT system. Its infrastructure supports real-time account reconciliation to handle high transaction volumes.
A key visible innovation of this system on the user side is the Easy Addressing System: Instead of IBAN, it allows transfers using identifiers like phone number, email address, or national ID number.
This makes it possible to send money to a contact in your phonebook without knowing their bank. Another innovation is the QR code payment infrastructure (FAST-TR QR Code).
TCMB has set standards for QR code payments in workplaces and linked them to instant payments via FAST. Thanks to this technical structure, consumers can pay instantly by scanning a QR code at a store without needing a POS device.
Initially, transaction limits were set low (e.g., 1000 TL) but have been gradually increased due to demand. By the end of 2023, the per-transaction limit was raised to 50,000 TL, and by 2024 to 100,000 TL.
These figures show that FAST is not only for small payments anymore but can be used for a wide range of transactions. FAST is protected by high security standards and has become the most practical way to transfer money bank-to-bank in the digital economy, starting a new era for both personal and commercial payments.
Takasbank: The Bridge Role in Securities and Payment Systems
Settling fund and security movements behind financial market transactions is critical. One of the key institutions in this area in Turkey is Takasbank (Istanbul Settlement and Custody Bank Inc.).
Takasbank plays a bridging role in the settlement of securities (stocks, bonds, etc.) trades and the payment of funds. For example, when a stock is bought or sold on Borsa Istanbul, Takasbank organizes both the transfer of the security and the payment between buyer and seller.
In this role, Takasbank acts as a central counterparty, establishing trust between parties; meaning it prevents the risk of the seller not receiving payment or the buyer not receiving the asset.
Takasbank also has an indirect role in payment systems: It organizes large interbank transfers and daily settlements via various platforms.
For instance, after thousands of card transactions are netted daily, interbank transfers are finalized at Takasbank and TCMB. Recently, Takasbank has also pioneered blockchain-based projects (e.g., digital asset transfers, gold transfer systems) to test future payment technologies.
Through this bridging role, synchronization between financial markets and payment systems is ensured, allowing smooth money circulation throughout the economy. Proper execution of securities transactions indirectly supports trust and operation in e-commerce and other sectors, as financial stability depends on well-functioning settlement and payment mechanisms.
In summary, Takasbank is a critical infrastructure provider behind the scenes in both capital markets and payment systems, ensuring secure flow of economic activity.
Global Payment Giants: Who Controls Payments Worldwide?
Visa, Mastercard, American Express, UnionPay: Card Scheme Operators
Globally, when it comes to payments, the first names that come to mind are usually credit and debit card schemes. Visa and Mastercard operate the most widely accepted card networks worldwide.
Neither of these organizations issue cards directly; instead, they provide the technology and rule sets that connect billions of cardholders with tens of millions of merchants. Thanks to Visa and Mastercard networks, banks’ cards worldwide adhere to common standards, allowing any Visa/Mastercard branded card to be accepted at any merchant globally.
American Express (Amex) follows a dual model, acting as both a card scheme and issuer. Although Amex cards are less widespread than Visa/MC, especially in the US and international business, they are known for premium programs and operate their own network.
UnionPay, based in China, is one of the largest card schemes by number of cards issued; beyond its domestic dominance, UnionPay cards have seen growing acceptance globally in recent years.
These card scheme operators form the backbone of global payment systems and define the rules, security protocols (like 3D Secure standards), and fee structures for all card transactions, including e-commerce.
For example, when a Turkish e-commerce site accepts payment from a foreign tourist’s Visa card, the transaction routes through the Visa network to the relevant banks for collection. Visa/Mastercard charge a small network fee for this service, maintaining system continuity.
In short, these few major companies provide the technological infrastructure and regulations underpinning card payments worldwide. Their reliability and speed have made international shopping an everyday convenience.
Worldpay, Adyen, Stripe, Square: Global Payment Processors
Another important group of players are global payment processors and platforms. These companies offer technology solutions that bridge banks and card networks for e-commerce sites and physical stores.
For instance, Worldpay is a well-established global payment processor handling credit card payments for thousands of major businesses worldwide. Originating from the UK, Worldpay offers services in local currencies and multiple payment methods through its international offices and licenses.
Adyen, a Netherlands-based fintech, has become a preferred platform for global brands; its advantage lies in supporting over 100 currencies and countless local payment methods on a single integrated platform.
This enables an e-commerce company using Adyen to manage card payments in Europe, Alipay/WeChat in China, and installment payments in Latin America seamlessly.
Stripe, known for its developer-friendly APIs, is a Silicon Valley-based payment infrastructure company. Stripe allows websites to add payment forms with just a few lines of code, making it popular among startups and developers.
Although Stripe has not yet officially entered the Turkish market, it sets global e-commerce trends. Square began by offering mobile POS devices to small businesses in the US and expanded into online payments.
Square revolutionized small merchants’ ability to accept cards using a smartphone attachment and later developed e-commerce solutions.
These global processors facilitate cross-border trade through scale and technological innovation. An e-commerce site with customers from different continents can partner with Worldpay or Adyen to manage all transactions centrally while accommodating local payment preferences.
In summary, Worldpay, Adyen, Stripe, and Square provide reliable payment infrastructure for both large corporates and small businesses, enabling global commerce.
Global Solutions Provided by PayPal and Authorize.Net APIs
When it comes to online payments, perhaps the most recognized name is PayPal. Founded in 1998, PayPal was the first major digital wallet and payment platform enabling payments via email addresses.
PayPal gained popularity by allowing consumers to pay online without sharing card details on every site. Today, millions of users and merchants worldwide accept PayPal as a payment option.
Thanks to API support, e-commerce sites can easily integrate PayPal and offer a "Pay with PayPal" button. This lets customers pay without sharing financial details with the merchant, using their PayPal account credentials.
PayPal also offers direct credit card processing through services like Braintree, providing multiple payment methods in one integration.
Authorize.Net, founded in 1996 when online payments were nascent, is a popular payment gateway solution in North America.
Its APIs and software libraries have enabled small businesses to add credit card payment features to their websites. The gateway abstracts complex processes (card verification, bank communication, approval/decline) behind a simple interface, easing developer work.
Although banks and fintechs now offer similar API-based solutions, Authorize.Net remains a pioneer. Both PayPal and Authorize.Net have contributed to global e-commerce growth by providing easy integration.
Business owners with limited technical knowledge can activate these services with a few configurations and accept payments globally. Ultimately, digital wallets like PayPal and gateways like Authorize.Net have accelerated cross-border payments since the 2000s.
Acquirers and International Transaction Infrastructure
First Data, Global Payments, Elavon, Worldline: Systems Used by Merchants
For a card payment to successfully reach the merchant from the cardholder, acquirers are required. Acquirers are banks or payment companies that process and collect card payments on behalf of merchants.
Although many banks provide acquiring services globally, some large independent companies offer acquiring services worldwide. First Data is one of the best-known examples.
US-based First Data (now part of Fiserv) manages payment transactions for millions of merchants by providing infrastructure directly to customers and on behalf of many banks. For example, card information entered during an online purchase is verified through First Data’s network, and the transaction is approved to complete the sale.
Global Payments is another payment processor operating worldwide, expanding through partnerships and acquisitions. It serves a wide range of merchants, from restaurants to airlines and public collections.
Elavon, part of US Bank, is active in Europe and North America. Many hotel chains, airlines, and online retailers use Elavon’s infrastructure for payments.
Worldline, a European giant with French/Swiss origins, strengthened by acquiring Ingenico’s payment division, operates national and international payment systems and provides cross-border payment services in e-commerce.
These large acquirers act like banks for merchants: They contract with merchants, maintain settlement accounts, and transfer card sales amounts to these accounts.
They share features such as high-capacity infrastructure, fraud prevention systems, and multi-payment method offerings. Thus, an e-commerce site partnering with First Data or Worldline can securely accept payments from customers worldwide without interruption.
Flow and Verification in Cross-border Payments
As e-commerce globalizes, cross-border payments have become routine for many businesses. When a cross-border card payment occurs, the transaction flow includes several extra steps compared to domestic transactions.
For example, if a customer in Europe shops on a Turkish e-commerce site using a credit card issued abroad, the issuing bank is overseas while the acquiring bank is in Turkey, so the transaction routes through international networks like Visa or Mastercard.
During this flow, card schemes, currency conversion, and interbank regulations of respective countries come into play. The issuer bank sends a real-time inquiry to approve the amount.
Since fraud risk is higher in international transactions, the issuing bank might require additional verification like 3D Secure.
Customers making cross-border purchases may be redirected to their bank’s page for SMS verification. These strict checks protect both cardholders and merchants.
Regulatory requirements like PSD2 in Europe also demand strong customer authentication.
Currency conversion occurs as well, with networks applying exchange rates and cross-border fees. Acquirers usually charge a few basis points more for foreign card transactions due to higher risk and costs.
Ultimately, the merchant receives payment in their currency, while the cardholder sees the charge in their own currency. Smooth operation depends on cooperation between acquirers and card networks.
Global acquirers localize processes via partnerships and licenses to speed verification and reduce fees. For example, processing European customers’ payments within Europe allows faster approval and lower costs.
Though complex, modern technology completes cross-border payments and verification in seconds, enabling e-commerce firms to sell worldwide.
Commission Rates and Transaction Speed Comparison
For international payments, commission fees and transaction speed are key considerations for businesses. Domestic card transactions usually have lower fees compared to cross-border ones.
This is due to multiple parties (local bank, international network, foreign bank) involved and costs like currency conversion. For instance, if a Turkish merchant pays 2% commission for local Visa/Mastercard transactions, foreign card payments may cost around 3%, plus currency conversion costs.
Although international acquirers offer competitive rates due to volume, overseas transactions are inherently more expensive. Businesses can optimize costs through negotiation or payment provider agreements.
Transaction approval technically takes seconds regardless of domestic or international nature. Customers typically see confirmation within 2-3 seconds after payment submission.
However, the time for funds to reach the merchant’s account varies. Some payment providers pay merchants next day for domestic transactions, but cross-border payments might take several days due to currency conversion and international transfers.
For example, a US credit card payment converted to TL and transferred to a Turkish merchant’s account may take 2-3 business days due to clearing processes.
Thus, cross-border payments are generally slower in terms of fund availability. Nevertheless, fintech innovations aim to reduce these delays, and some crypto-based solutions offer near-instant cross-border transfers.
Technology Providers: The Power Behind Payments
POS Device Manufacturers and Mobile Payment Terminal Providers
One of the most visible tangible elements in the payment world is the POS devices seen next to cash registers in stores. Companies producing and developing these devices are important players behind payment technologies.
Companies like Ingenico and Verifone have led the sector for years by producing the world’s most widely used POS terminals. In Turkey, most bank-distributed POS devices were from these two brands.
These devices have evolved to support every innovation from magnetic stripe cards to chip cards and contactless payments (NFC). Recently, mobile POS terminals and new generation smart POS devices have become more widespread.
For example, Android-based touchscreen POS devices have been launched; these devices work like tablets and allow installing different applications. Thus, a cafe owner can track sales reports and manage inventory on the same device.
Another category called mobile POS includes small card reader attachments. Examples abroad include Square and iZettle—mini card readers connected via Bluetooth to smartphones—offering alternatives to traditional POS for small merchants and traveling sellers.
Similar mobile POS solutions are offered by banks or fintech firms in Turkey (e.g., small chip devices that work with phones to accept credit card payments). Also, the increasingly popular SoftPOS technology deserves mention:
This technology turns NFC-enabled smartphones into POS devices without extra hardware. Business owners can receive contactless payments by simply touching customers’ cards to the phone using an app.
All these device and technology providers enable payment transactions to happen in the physical world. Their innovations accelerated the transition from cash to card and now enable new shifts like moving from POS devices directly to smartphones.
This competitive sector strives to make payment acceptance more portable, fast, and user-friendly, providing great convenience where e-commerce intersects with physical trade (e.g., cash on delivery, in-store pickup).
API-Based Payment Infrastructure Platforms and Integration Examples
Software is as critical as hardware behind payment processes. Especially for e-commerce sites and mobile apps, API-based payment infrastructures are vital.
API (Application Programming Interface) enables communication between different software. Payment providers offer comprehensive API services to allow businesses to easily integrate their systems into websites or apps.
For instance, an e-commerce site collects credit card data on the payment page and calls the payment provider’s API to complete the transaction. Thus, card verification, authorization, and approval/decline processes happen securely in the background.
Companies like İyzico, PayTR, Stripe, and PayPal provide well-documented API endpoints for developers. A concrete integration example:
Suppose a food ordering app lets a user enter card information and press “pay”. The app sends a secure API request with amount, currency, and card details.
The payment platform forwards this to the relevant bank, obtains approval, and returns success/failure to the app. This entire process may complete in under a second.
The beauty of API-based approach is standardization and reusability. Thousands of different sites/apps using the same payment platform API share the same secure infrastructure but have their own interfaces.
To ease integration, many providers offer SDKs and ready-made code libraries. For example, iOS/Android SDKs for mobile apps and libraries in Java, Python, PHP, JavaScript, etc., for web.
Developers can use these pre-built functions to implement payment systems quickly without coding everything from scratch.
B2B Fintech Solutions for Building E-Commerce Infrastructure
The payment ecosystem not only caters to end-users but also includes many fintech solutions focused on B2B (business-to-business). These solutions typically provide technology directly to other businesses or financial institutions, facilitating the setup of e-commerce infrastructure.
For example, a bank wanting to offer a modern mobile wallet app to its customers can license the infrastructure from a specialized fintech company instead of building it from scratch. In Turkey, there are companies providing white-label payment solutions to banks, telecom operators, or large retailers.
A white-label example: imagine a supermarket chain aiming to integrate a payment system into its mobile app so customers can pay within the app. The company can use APIs from an existing fintech platform to issue wallets or prepaid cards under its own brand.
B2B fintech solutions cover not only wallets but also subscription management, invoice collection platforms, marketplace payment systems, installment sales modules, fraud prevention tools, and more.
Consider a marketplace e-commerce site where sellers list products and the platform takes a commission from each sale, transferring the remainder to the sellers.
For this revenue sharing and multi-party payment scenario, fintech companies offer specialized “payout” solutions. This allows marketplaces to automatically separate commissions and distribute payments to sellers without manual calculations.
Similarly, services that store card information and enable scheduled recurring payments (subscription renewals) are provided by B2B fintech platforms; e-commerce companies use these services instead of building complex systems themselves.
The importance of B2B-focused payment technology providers lies in enabling all ecosystem players to focus on their core business. Large corporates save time by outsourcing payment technology; small startups gain access to secure and comprehensive infrastructure they could not build alone.
Payment Security: 3D Secure and Fraud Systems
How the 3D Secure System Works and User Experience
One of the most important technologies developed to increase security in online card payments is the 3D Secure system. 3D Secure creates an additional verification layer between card-issuing banks and merchants.
Visa implements this system as “Verified by Visa,” and Mastercard calls it “SecureCode” (both are known as 3D Secure 2.0 in newer versions). Simply put, the process is as follows:
When a customer reaches the payment step on an e-commerce site and enters card details, if 3D Secure is active, they are redirected to their bank’s page or mobile app. The bank requests a second verification, usually by asking for a one-time password sent via SMS or approval through the bank’s mobile app.
Once the correct password is entered or approval given, the bank sends a confirmation message to the merchant, and the sale completes.
The primary purpose of 3D Secure is to prevent unauthorized transactions even if the card details have been stolen; since the fraudster would not know the password sent to the cardholder’s phone.
From a user experience perspective, the first generation 3D Secure 1.0 pop-ups and redirects could be confusing and sometimes caused customers to abandon purchases.
However, with 3D Secure 2.0, the experience has improved significantly. Integrated flows allow biometric approval via mobile apps, instant notifications, and smoother verification processes.
In Turkey, 3D Secure is widely used; many banks require it by default for online transactions.
This benefits both customers and merchants by significantly reducing fraud risk. Merchants also gain protection against chargebacks (disputed transactions) when 3D Secure verification is completed.
While there may be a few extra seconds of effort for the user, the system acts as a strong shield against misuse of card data. 3D Secure has become a standard in modern e-commerce, balancing security and user experience.
Future improvements may include biometric authentication methods making the process even more seamless, but the core goal remains: ensuring the rightful cardholder is performing the transaction.
Fraud Detection Technologies and AI-Powered Fraud Prevention
Another crucial aspect of payment security is fraud detection systems. These systems analyze transactions in real time or near real time to identify suspicious activity.
Traditional methods relied on static rules, such as “trigger an alert if the same card is used in five different countries within an hour.”
However, fraudsters evolve tactics, making static rules insufficient. This is where artificial intelligence and machine learning come into play.
Modern fraud prevention algorithms learn from millions of transactions to distinguish between normal and abnormal behaviors.
For example, a user’s shopping habits (typical times, amounts, and locations) are modeled.
Deviations, such as a high-value purchase from an unusual country at midnight, may trigger automatic alerts.
AI systems use both supervised learning (learning from known fraud cases) and unsupervised learning (detecting new patterns without prior examples).
Fraud prevention assigns risk scores to transactions—for instance, rejecting transactions with a 95/100 risk score or directing medium-risk transactions to 3D Secure verification.
Layered security ensures risky transactions are either blocked or require additional authentication.
Technologies like device fingerprinting, IP address analysis, and geolocation matching are used.
For example, a user who always shops from Istanbul suddenly ordering from another continent may be flagged. Or multiple card attempts in a short period could signal fraud.
AI excels at analyzing multidimensional data quickly, making decisions more accurately than humans. Payment providers invest heavily in these systems to prevent losses and maintain customer trust.
Though customers rarely notice these systems, they stop many potential fraud attempts behind the scenes.
Identity Verification APIs and KYC/AML Processes
Payment security also involves verifying the trustworthiness of customers and partners, not just monitoring transactions. KYC (Know Your Customer) and AML (Anti-Money Laundering) processes are essential here.
KYC involves confirming the identity of clients registering for financial services and assessing their risk profiles. For example, an electronic money institution verifies new wallet account holders’ ID numbers, full names, and birth dates against official population records.
Identity verification APIs access governmental databases (like Turkey’s MERNIS) or specialized verification services.
Many fintech companies automate user verification using these APIs. AI-powered OCR (optical character recognition) and facial recognition technologies are also integrated: customers upload photos of their ID cards and selfies, enabling systems to confirm the identity matches.
This allows for quick and remote account opening and approval.
AML aims to prevent financial systems from being used for illegal activities. Payment providers must scan large or suspicious transactions and report to authorities when necessary.
For example, many small transfers adding up to a suspicious total might be flagged as potential money laundering.
Sanctions lists from entities like the UN or OFAC are also checked. Customers on these lists cannot open accounts or transact.
API-based blacklist checks allow fintech firms to automate these screenings.
Additionally, proof of funds documentation may be required for large transactions.
Customers may find these verification steps cumbersome, but they are crucial for legal compliance and security.
Choosing a Payment Provider: Key Considerations
Licensing and BDDK/TCMB Approval
One of the most important aspects for any e-commerce business or payment service user is whether the payment provider has a legal license.
In Turkey, payment institutions and electronic money institutions must obtain operation permits under Law No. 6493. Initially, these licenses were issued by the Banking Regulation and Supervision Agency (BDDK), but now the regulatory authority is the Central Bank of the Republic of Turkey (TCMB).
Working with a licensed provider is indispensable for both security and legal reasons. Using an unlicensed or unregulated payment intermediary can cause serious problems, such as the company failing to pay your funds or suddenly ceasing operations.
Therefore, the first step when choosing a payment provider is to verify whether the company holds an official license. This information is usually indicated on the company's website footer with phrases like “BDDK/TCMB licensed,” and TCMB publishes a list of all licensed payment and e-money institutions.
A license is not just a formality but indicates that the company meets capital adequacy requirements, complies with information security standards, and protects customer funds. For example, electronic money institutions must keep customer assets in segregated accounts at Takasbank or a bank. Unlicensed companies do not offer such guarantees.
In summary, licensing is a non-negotiable criterion when selecting payment infrastructure. Globally, similar regulatory frameworks exist; for example, in Europe, payment services must be authorized by the country’s central bank or financial authority. Ensuring your payment provider complies with laws is fundamental to your business’s sustainability and reputation.
User Interface, Technical Support, and Transaction Fees
Operational and technical factors also play a significant role in payment provider selection. Chief among these is the user interface (UI) and overall user experience offered.
For instance, being able to view daily sales via clear dashboards, filter transactions, and easily manage refunds/cancellations can greatly ease your work. Some providers offer modern, intuitive panels, while others may have outdated or complex interfaces.
For small businesses without technical teams, a user-friendly interface and well-documented guides are crucial.
Another key factor is integration support and quality of technical assistance. During integration or after going live, you may encounter issues that require quick and competent support. Ideally, a provider offers 24/7 reachable support or rapid intervention teams. Some companies assign dedicated account managers, while others rely on slower ticket systems. These differences can impact your business significantly, as payment downtime means lost sales.
Transaction fees and commission structures are naturally decisive. In Turkey, virtual POS commission rates usually range from 1.5% to 3% depending on transaction volume, sector, and negotiation power.
Additionally, some providers charge a fixed fee per transaction (e.g., 0.25 TRY), while others do not. Some require monthly fixed fees or offer subscription packages, others work solely on transaction-based cuts. You should calculate the best model based on your expected turnover and transaction count.
Compatibility Criteria for Businesses Planning International Expansion
If your e-commerce business plans not only to sell within Turkey but also to expand internationally, your payment infrastructure must align with this vision.
Firstly, supporting multiple currencies is a major convenience for global sales. For example, if you want to display prices in TRY, USD, and EUR, your payment provider should be able to open separate accounts for each currency or perform dynamic conversions.
Some local payment providers may focus only on TRY collection, which can create exchange rate uncertainty for international customers.
If the provider can collect payments directly in foreign currencies and deposit them into your foreign currency accounts, this is an advantage for international trade.
Accepting foreign cards is another important criterion. While Visa and Mastercard are widely accepted, not every payment provider supports American Express or UnionPay.
If you sell tourist products or target a global audience, your payment infrastructure should accept Amex, Discover, JCB, and other schemes.
Alternative payment methods are also worth considering: For example, for Europe, options like PayPal or Klarna; for East Asia, Alipay or WeChat Pay integration might be important. Some globally operating payment firms offer these options.
Compliance is also critical. International expansion means adhering to various countries’ data protection, tax, and financial regulations.
For instance, operating in the EU requires GDPR compliance. Your payment partner should at least have GDPR-compliant systems and protect customer data.
PSD2 in Europe mandates strong customer authentication and open banking APIs; if you sell directly to European customers, having a payment provider compliant with these regulations simplifies operations.
PCI-DSS compliance is another critical standard: Systems processing card data must meet these security standards. A reputable payment provider will hold PCI-DSS Level 1 certification, relieving you of direct card data security responsibilities.
Operational competence is important for global work as well. Can your provider respond to support requests across different time zones and languages?
Future Payment Technologies: Crypto, NFC, and CBDC
Cryptocurrency-Backed Payment Solutions
One of the biggest innovations in finance over the past decade, cryptocurrencies are poised to shape the future of payment technologies. Starting with Bitcoin and evolving with platforms like Ethereum, the crypto ecosystem was initially seen as a digital investment or store of value, but its core vision is peer-to-peer electronic payments.
Nowadays, some e-commerce sites and businesses have begun offering crypto payments as an option. For example, tech stores in certain regions accept Bitcoin, and some global online service providers enable crypto payments.
Crypto payments eliminate intermediaries, enabling direct wallet-to-wallet transfers, potentially lowering transaction costs and speeding cross-border payments.
For instance, if a Turkish seller accepts crypto directly, there are no banks, card networks, or acquirers involved; the customer sends crypto, and the seller sees it instantly in their wallet.
However, practical challenges exist: Volatility of cryptocurrencies is a major concern. The value of 100 dollars in crypto today could be 80 or 120 dollars tomorrow, posing risks for both merchants and consumers.
Therefore, many payment solutions focus on stablecoins — crypto assets pegged to the dollar. Stablecoins like USDT and USDC aim to maintain a 1:1 dollar value, making payments more predictable.
In Turkey, a 2021 regulation prohibits direct use of crypto assets for goods and services payments. So legally, stores cannot say "pay me in Bitcoin."
However, approaches differ worldwide: El Salvador has adopted Bitcoin as legal tender, while other countries remain cautious. Crypto-backed payment infrastructures have not disappeared though:
Some local and international platforms offer merchant services where customers pay in crypto, but the platform instantly converts it to local currency and deposits it to the seller’s account.
This allows merchants to accept crypto without exposure to volatility risk. As regulations clarify, such crypto payment bridges may become more widespread.
The Spread of Contactless Payment (NFC) Systems
Contactless payment technology, allowing users to pay by simply bringing their card or phone close to a POS device, has become a part of daily life.
Using NFC (Near Field Communication) protocols, contactless payments were first introduced for quick, PIN-free small transactions. The COVID-19 pandemic accelerated their adoption due to hygiene concerns.
Today, most POS devices in Turkey support contactless payments; transactions under 500 TRY usually do not require PIN, while higher amounts often require PIN confirmation.
Contactless technology is used not only on cards but also on smartphones and smartwatches. Mobile wallets like Apple Pay, Google Pay, and Samsung Pay let users pay by using their phones like a credit card (though as of 2025, Turkish banks do not officially support Apple/Google Pay, foreign cards do work).
Banks also offer NFC payments via their own mobile apps. Many bank apps enable “mobile contactless” payments where you simply tap your phone to the POS.
Contactless payments intersect with e-commerce through digital wallet integrations. For instance, users can complete mobile app payments by tapping Apple Pay buttons and confirming with Touch ID instead of entering card details.
This improves user experience significantly, especially on mobile where typing card numbers is cumbersome.
Turkey's BKM has also developed the TR QR Code standard, which allows scanning QR codes at markets or online to pay. Though different from NFC, it shares the goal of secure payment without physical card input or cash.
Looking forward, contactless payments will evolve into various new forms.
Central Bank Digital Currencies (CBDC) and the Transformation of Payment Systems
As cryptocurrencies and stablecoins rise, central banks worldwide are racing to develop their own digital currencies. CBDC (Central Bank Digital Currency) refers to the digital version of a country’s official currency.
Unlike cryptocurrencies, CBDCs are issued and backed by a central authority (the central bank). For example, a digital Turkish Lira issued by TCMB would be the digital equivalent of paper lira, backed by the government and potentially replacing physical cash.
CBDCs hold transformative potential for payment systems. They could allow citizens and businesses to hold accounts directly at the central bank.
Currently, physical cash is carried by individuals; with digital cash, a central bank wallet might replace this. This could reduce the role of commercial banks, as transfers between individuals would be simple ledger entries at the central bank.
CBDCs could increase payment speed and reduce costs, making 24/7 instant, low-cost payments standard.
While existing systems like FAST already move in this direction, a digital Lira could enable even more efficient models.
For example, China has piloted the digital Yuan (e-CNY) with millions of users spending through mobile apps. The European Central Bank is developing a digital Euro with ongoing discussions.
Turkey has launched the “Digital Turkish Lira Cooperation Platform” and started pilot transactions in 2022-2023.
Turkey’s digital currency will likely run on a blockchain-like distributed ledger controlled by the central bank.
CBDCs will affect e-commerce as well. E-commerce sites could add “Pay with Digital Lira” options.
Customers would transfer digital money via central bank wallets or bank interfaces, and merchants would receive instant payment confirmations. Intermediaries like card schemes, commissions, or chargeback risks might be minimized.
This could lower payment costs and reduce commissions for merchants.
CBDCs would increase transparency and traceability, benefiting tax tracking and preventing illegal activities.
Privacy concerns exist, as digital cash records all transactions, unlike anonymous physical cash.
CBDCs are expected to enter daily life within 5-10 years, initially as alternatives alongside traditional payment methods.
Over time, if widely adopted and trusted, CBDCs could replace credit cards and EFTs. The digitization of money is an inevitable step in the digital world. Turkey is among the early adopters preparing its e-commerce ecosystem for this future.
Businesses and consumers should be aware now to prepare for the upcoming new payment era.
Choosing a Payment Provider: Key Considerations
Licensing and Regulatory Approval by BDDK/TCMB
For any e-commerce business or payment service user, one of the most critical factors is whether the payment provider holds a valid license.
In Turkey, payment institutions and electronic money institutions must operate under licenses granted according to Law No. 6493. While these licenses were initially issued by the Banking Regulation and Supervision Agency (BDDK), currently, the Central Bank of the Republic of Turkey (TCMB) is the regulatory authority.
Working with a licensed provider is essential for both legal compliance and security. Using unlicensed or unauthorized payment intermediaries can cause serious problems, such as the company failing to remit your funds or ceasing operations unexpectedly.
Thus, the first step in choosing a payment provider is verifying the company's official license status. This information is typically displayed on the company's website footer as “BDDK/TCMB licensed”, and TCMB publishes a list of all licensed payment and electronic money institutions.
A license is not merely formal; it certifies the company meets capital adequacy requirements, complies with information security standards, and safeguards customer funds. For example, electronic money institutions must hold customer assets in escrow accounts at Takasbank or a bank. No such guarantee exists for unlicensed entities.
Consequently, licensing is a non-negotiable criterion when selecting payment infrastructure. Globally, similar practices apply, such as ensuring authorization from central banks or financial regulators in other countries. Ensuring your financial transactions are handled by a legally compliant entity is fundamental to your business’s sustainability and reputation.
User Interface, Technical Support, and Transaction Fees
Operational and technical considerations are also crucial when selecting a payment provider. Among these, the quality of the user interface (UI) and overall user experience is paramount.
For example, being able to track daily sales with clear charts, filter transactions, and easily manage refunds or cancellations greatly simplifies operations. Some providers offer modern, user-friendly dashboards, while others have outdated or complicated interfaces.
This is especially important for small businesses without technical teams, where intuitive interfaces and well-documented user guides can make a big difference.
Another critical aspect is the quality of integration and technical support. During integration or after going live, issues may arise requiring prompt and knowledgeable assistance. Ideally, payment providers offer 24/7 support or rapid-response teams. Some assign dedicated account managers, while others rely on slower ticketing systems. Such differences can significantly impact your business, as payment system downtime directly translates into lost sales.
Transaction fees and commission structures are also important. In Turkey, virtual POS commission rates generally range between 1.5% and 3%, depending on transaction volume, sector, and negotiation power.
Some providers charge a fixed fee per transaction (e.g., 0.25 TRY), while others do not. Some require monthly fixed fees or offer subscription packages; others work solely on transaction-based fees. You should evaluate the model that best fits your expected turnover and transaction frequency.
Compatibility for Businesses Targeting International Markets
If your e-commerce business plans to expand beyond Turkey, your payment provider must support this goal.
Supporting multiple currencies is a significant convenience for international sales. For example, if you want to display prices in TRY, USD, and EUR, your payment provider should be able to open accounts in different currencies or dynamically convert between currencies.
Some local providers focus solely on TRY collections, which may cause exchange rate uncertainty for international customers.
Providers capable of collecting payments in foreign currencies and depositing them into your foreign currency accounts offer a distinct advantage.
Acceptance of foreign card schemes is another important consideration. Visa and Mastercard are widely accepted, but not all providers support American Express or UnionPay.
If you sell to tourists or global customers, your payment infrastructure should accept Amex, Discover, JCB, and others.
Alternative payment methods may also be important: For example, PayPal or Klarna for Europe; Alipay or WeChat Pay for East Asia. Some global payment firms offer these options.
Compliance with data protection, tax, and financial regulations across countries is critical. For example, operating in the EU requires GDPR compliance. Your payment provider should have GDPR-compliant systems to protect customer data.
PSD2 mandates strong customer authentication and open banking APIs in Europe; providers compliant with these regulations ease selling to European customers.
PCI-DSS compliance is mandatory for systems handling card data. Providers with PCI-DSS Level 1 certification ensure you are not directly responsible for card data security.
The provider's operational capacity to support multiple time zones and languages is also important.
