Summary
Companies that offer payment order initiation and account information services within the scope of open banking are required to obtain a payment institution license from the CBRT. While a relatively more flexible regulation infrastructure has been established for companies that exclusively provide account information services, companies that will provide payment order initiation service are subject to similar obligations as other payment institutions.
Payment service providers are obliged to connect to BKM through the BKM-API Gateway and provide the necessary infrastructure to initiate payment orders and provide account information services to companies to carry out their activities.
While the regulation prohibits payment institutions from engaging in any commercial activities other than training and consultancy services related to payment services and ancillary services that complement payment services such as card data processing, fraud prevention, open banking companies, legal entities and merchants are subject to administrative and operational processes. may provide value-added services and information services related to other accounts held by payment service providers and not considered as payment accounts.
Establishment and Activities of Open Banking Companies
Open banking transactions in our country have been included in the regulation with the amendment made in 2019 in the Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions. Accordingly, subparagraphs (f) and (g) added to article 12/1 of Law No. 6493 are included in the scope of payment services with two main fields of activity:
- Payment order initiation service offered for a payment account in another payment service provider at the request of the payment service user,
- The service of presenting consolidated information regarding one or more payment accounts of the payment service user on online platforms, provided that the payment service user’s consent is obtained.
Thus, in parallel with PSD-II, payment order initiation service (Payment Initiation Service Provider) and account information service (Account Information Service Provider) are included in the scope of payment services.
According to Article 14/A-2 of the Law, the authority to determine the procedures and principles regarding open banking services was given to the CBRT and the relevant sub-regulation set was published by the CBRT on 1 December 2021. The sub-set of regulations includes the Regulation (Regulation) on Payment Services and Electronic Money Issuance and Payment Providers, and the Communiqué (Communiqué) on Information Systems of Payment and Electronic Money Institutions and Data Sharing Services in the Field of Payment Services Providers, and its annexes.
Status of Companies Engaging in Open Banking Activity
The Law No. 6493 defines the legal entity authorized under this Law as a payment institution to provide and perform payment services. In Article 12/1 of the Law, payment order initiation service and account information service activities are determined as payment services. Accordingly, institutions dealing with these activities, which are the two main areas of open banking, are in the status of payment institutions according to the Law. In this context, payment institutions engaged in open banking acquire legal personality as payment order initiation service provider (ÖBHS) and account information service provider (HBHS).
Establishment and Activities of Open Banking Companies
The Regulation has not designed the procedures and principles regarding the establishment and activities of payment institutions engaged in open banking activities, fundamentally different from other payment institutions. Accordingly, as a rule, the issues that apply to other payment institutions also apply to payment institutions that provide payment order initiation service and account information service, in other words, open banking institutions.
The Regulation has subjected companies that offer payment order initiation services to the same obligations as other payment institutions due to the nature of their activities. On the other hand, it has introduced exemptions that subject payment institutions providing account information services to lower obligations.
Accordingly, open banking companies are subject to the same obligations as other payment institutions in areas such as corporate governance principles, internal control and risk management, accounting, reporting, independent auditing, business continuity plan or information systems audit. Companies that offer payment order initiation services must comply with the same rules as other payment institutions in terms of minimum equity obligation and collateral obligation. It was deemed sufficient for the account information service companies to have a paid-in capital of 2 million, and these companies were not subject to a minimum equity obligation. Pursuant to the first paragraph of Article 14/A of the Law No. 6493, the payment institutions providing account information services are not required to issue the share certificates against cash, to have all registered shares and to have minimum capital requirements. As a matter of fact, with the 17th paragraph of the 11th article of the Regulation titled operating permit, these companies are exempted from the determination obligations regarding the capital among the documents to be submitted during the application (Article 11/4-c and Article 11/10-a). In addition, the guarantee liability for these companies has been determined as 1 million TL, and the option of having professional liability insurance instead of the guarantee has been given.
In the table below, some obligations of companies providing payment order initiation and account information services are given comparatively:
| Payment Order Initiation Service | Account Information Service | |
| Application Fee | 500.000 TL | 500.000 TL |
| License Fee | 1 milyon TL | 1 milyon TL |
| Paid-in Capital | 2 milyon TL | No minimum capital requirement and no cash payment obligation |
| Minimum Equity Liability | 5 milyon TL | – |
| Guarantee Obligation | 3 milyon TL | 1 million TL in case of not having Professional Liability Insurance |
| Professional Liability Insurance | – | 1 million TL worth |
In the annex of the petition regarding the final approval stage in the application process for the operating permit of open banking companies, Bankaanlar Kart Merkezi A.Åž. They must also submit a document to be issued by BKM.
Principles Regarding Payment Order Initiation Service and Account Information Service
According to Article 59/1 of the Regulation, the procedures and principles regarding initiating payment orders and carrying out transactions related to account information services, as well as the technical and operational requirements to be complied with by the parties, will be determined by the CBRT. In this context, the CBRT will publish another sub-regulation in the coming period. The task of supervising compliance with these technical and operational requirements was given to BKM. BKM will announce the organizations that have successfully completed the technical control and evaluation process on its website.
All payment service providers that hold payment accounts that may be related to payment order initiation and account information services must connect to the BKM-API gateway and provide the necessary infrastructure to all other authorized payment service providers that will provide payment initiation order and account information services. The Regulation defines payment service providers as banks, electronic money institutions, payment institutions and Post and Telegraph Organization Joint Stock Company within the scope of Law No. 5411. In this framework, accounts other than current accounts, transaction accounts, credit card accounts, electronic money accounts and accounts opened on behalf of the customer, where funds can be transferred to other persons without being linked to any other account, and where temporary movements are monitored, are defined as payment accounts. The CBRT has been authorized to decide that account types other than these should also be considered as payment accounts.
As a rule, payment institutions may operate within the scope of payment services listed in the Regulation, limited to those specified in the application for operating permits, which are deemed appropriate by the CBRT. In addition, they cannot engage in any commercial activity other than training and consultancy services related to payment services and ancillary services that are complementary to payment services such as card data processing, fraud and fraud prevention, which are relevant and secure and facilitate the activities of payment service providers.
Despite the prohibition of payment and electronic money institutions to engage in commercial activities, an exception has been introduced with Article 15/8 of the Regulation in favor of institutions engaged in open banking. Accordingly, organizations providing payment order initiation services and account information services may provide value-added services and information services related to other accounts held by payment service providers and not considered as payment accounts, regarding the administrative and operational processes of legal entities and merchants. This is not considered as a violation of the prohibition to engage in commercial activities. The Regulation defines value-added services as services that are not within the scope of payment services pursuant to the Law, but that facilitate, secure or increase the efficiency of the administrative and operational processes of legal entities and traders such as trade debt and receivable management, accounting, invoicing, product, stock and supply management. In this context, companies that currently provide value-added services using open banking products have been granted a license from the CBRT to continue these activities to the extent that they comply with the Regulation.
Av. Dr. Mehmet S. YURTÇİÇEK Ramazan KÜÇÜK
Senior Consultant & Manager Financial Services & Risk Management Specialist