Funds collected for the realization of the payment service and funds collected for the issuance of electronic money shall be protected within the framework of the procedures and principles determined by the regulation.
1- PAYMENT INSTITUTIONS AND ELECTRONIC MONEY INSTITUTIONS OPERATE WITH CBRT LICENSE
Pursuant to Law no. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions (Law), payment institutions and electronic money institutions are required to obtain an operating license granted by the CBRT.
The below criteria shall be satisfied in order to obtain an activity permit;
Payment and electronic money institutions that are members of our Association are institutions authorized to operate by the CBRT.
2- PAYMENT INSTITUTIONS AND ELECTRONIC MONEY INSTITUTIONS ARE SUBJECT TO THE AUDIT AND SUPERVISION OF THE CBRT and FCIB (MASAK)
On-site supervision and remote surveillance of payment institutions and electronic money institutions, their branches and representatives shall be conducted by the CBRT. The CBRT is authorized to take necessary measures against the institutions as a result of the audit activities conducted by the CBRT.
At the same time, payment and electronic money institutions are subject to liability audits conducted by FCIB (MASAK).
3- PAYMENT INSTITUTIONS AND ELECTRONIC MONEY INSTITUTIONS ARE SUBJECT TO INDEPENDENT AUDIT
The annual independent financial audit of payment institutions and electronic money institutions shall be conducted by independent audit companies authorized by the Public Oversight, Accounting and Auditing Standards Authority. In addition, an information systems audit shall be conducted every 2 years in accordance with the principles determined by the CBRT.
Article 21 of the Regulation on Payment Services and Electronic Money Issuance and Payment Institutions and Electronic Money Institutions (Regulation)
“(1) Within the framework of the procedures and principles determined by the Public Oversight, Accounting and Auditing Standards Board, the institution is obliged to account for all its transactions in accordance with their true nature, and to prepare its financial reports in a timely and accurate manner, in a form and content that can meet the need to obtain information, in an understandable, reliable and comparable manner, suitable for audit, analysis and interpretation.
(2) The independent audit of the institution’s year-end financial statements shall be performed by independent audit firms included in the list of Independent Audit Firms authorized by the Public Oversight, Accounting and Auditing Standards Authority to conduct independent audits, including public interest organizations."
Regulation - Article 64
"(1) The Board shall determine the procedures and principles regarding the management of the information systems used by the institutions in performing their activities within the scope of the Law and their audit by authorized independent audit firms."
Article 1 of the Communiqué on the Management and Audit of Payment Institutions and Electronic Money Institutions’ Information Systems (Communiqué)
"(1) The purpose of this Communiqué is to set out the principles and procedures regarding the management of the information systems used by payment institutions and electronic money institutions in the performance of their activities under the Law and their audit by authorized independent audit firms."
Communiqué - Article 17
“(1) With the aim of determining the compliance of the institution with the provisions of this Communiqué, the information systems audit is the process consisting of the stages of forming an opinion on the effectiveness, adequacy and compatibility of the mentioned internal controls and reporting the results, as a result of the evaluation by independent audit firms of information system elements such as processes, activities, software and hardware within the scope of information systems management and internal controls established within these systems and processes.
(5) Information systems audit within the organization is conducted biennially. The Institution may vary the scope and frequency of information systems audit when deemed necessary.”
4- PROCEDURES AND PRINCIPLES OF PRESERVATION OF FUNDS
Pursuant to Article 22 of the Law and Articles 26, 27 and 28 of the Regulation, funds received from customers and kept on behalf of customers by payment institutions and electronic money institutions must be preserved in private accounts opened before the banks operating within the scope of Law No. 5411 and they cannot be used for any other purpose.
What is a redemption fund?
These are the funds received from the customer by the payment or electronic money institution, its branches or its representatives for the realization of a payment transaction and kept on behalf of the customer before the payment is made.
How are the redemption funds preserved?
Payment and electronic money institutions follow up the redemption funds by separating them from other funds and are entitled to only use such funds for payment transactions.
If the payment is not made at the end of the business day following the day of receipt from the customer, redemption funds received from the customer for payment purposes are deposited into accounts opened in the name of a payment or electronic money institution before a bank falling to the scope of Law No. 5411 and used only for the purpose of preserving such funds. These accounts are called “preservation accounts”.
Payment and electronic money institutions keep records of funds within the preservation accounts in a way that enables them to be followed up on a customer basis.
Payment and electronic money institutions compare their own records regarding the funds that they hold in their preservation accounts with the bank statements on a daily basis; on each business day, they come to an agreement as to the records of the previous business day and in this way ensure that all the funds received from the customer are kept within the preservation accounts.
What is an electronic money preservation account?
Funds received from the customer in exchange for issuing electronic money by the electronic money institution, its branches or representatives, and which are not used by the customer or returned to the customer until the end of the business day following the day of receipt, are transferred to an account opened before a bank within the scope of Law No. 5411 for the sole purpose of preserving the funds in which these funds will be kept. Such account is called an “electronic money preservation account”.
The end-of-day balance of the electronic money preservation account is blocked within the account before the Central Bank of the Republic of Turkey by the bank holding the electronic money preservation account.
The electronic money institution follows up the funds received in return for the issuance of electronic money by separating them from all other funds and cannot use such funds for a different purpose.
The electronic money institution transfers the funds which it receives from its customers for other payment services it offers, other than the payment services performed with the electronic money it issues, to the preservation account within the scope of the rules regarding the preservation of redemption funds.
Regulation - Article 26
(1) Redemption funds consist of the total of funds received from a payment service user or another payment service provider on behalf of a payment service user and held on behalf of a payment service user by the payment institution, its branches, representatives, or a third-party service provider acting on behalf of the payment service user for the execution of a payment transaction, but which are not yet paid to the receiver or to the receiver’s payment service provider.
(2) The payment institution follows up the redemption funds by separating them from other funds and may only use such funds for the execution of the payment transaction.
(3) Unpaid amount of the redemption funds at the end of the business day following the day of receipt, is deposited to the preservation accounts opened in the name of the payment institution before a bank within the scope of Law No. 5411 and used only for the purpose of preserving such funds.
(5) The payment institution keeps records of the funds within the preservation accounts in such a way that the payment funds may be tracked on a payment service user basis.
(6) The payment institution is obliged to ensure the reconciliation of the records of the previous business day on each business day, by comparing its own records of the funds in the preservation accounts with the bank statements to be received from the bank on a daily basis.
Regulation - Article 27
"(1) Amounts received in exchange for issuing electronic money by the electronic money institution, its branches, representatives or a third-party service provider acting on behalf of the electronic money institution, which are not converted into funds until the end of the business day following the day of receipt, are transferred to an account opened before a bank under the Law No. 5411 for the sole purpose of preserving the funds in which these funds shall be kept. This account is defined as an electronic money preservation account before the relevant bank.
(3) The end-of-day balance of the electronic money protection account is blocked in its account before the Central Bank by the bank holding the electronic money protection account.
(4) The electronic money institution follows-up the funds received in return for the issuance of electronic money by separating them from all other funds and cannot use them for a different purpose.
(5) Funds received for payment services other than payment services performed with electronic money are protected within the framework of the procedures and principles specified in Article 26.
(6) The sixth, seventh, eighth and ninth paragraphs of Article 26 shall apply to the reconciliation transactions of electronic money institutions and their reporting to the institution.
Regulation – Article 28
“(1) Preservation accounts and electronic money preservation accounts opened for the protection of redemption funds in cases specified within the third paragraph of Article 22 of the Law are blocked by the relevant bank in order to indemnify the rights of the fund owners and to fulfill the obligations of the institution arising from the Law.”
5- MINIMUM FULLY PAID CAPITAL AND EQUITY LIABILITY
In order to maintain the sustainability of their financial structures, payment and electronic money institutions are subject to a minimum equity obligation, which is calculated by taking into account the payment volume and the amount of electronic money in circulation, within the framework of the procedures determined by the regulation.
Regulation – Article 25
“(1) The equity of the institution is calculated as of the end of June and December in accordance with the procedures and principles specified in Article 24. The calculated equity cannot be less than the minimum fully paid capital amount specified in subparagraph (ç) of the second paragraph of Article 14 of the Law, and the minimum equity amount calculated in accordance with the third paragraph, according to the activities carried out for the payment institution; and in terms of the electronic money institution, the calculated equity cannot be less than the minimum fully paid capital amount specified in subparagraph (ç) of the third paragraph of Article 18 of the Law and the minimum equity amount calculated according to the sixth paragraph.
(3) The minimum equity amount consists of the sum of the following amounts:
(6) The electronic money institution is obliged to hold equity equal to two percent of the average amount of electronic money in circulation. The electronic money institution, which also carries out the payment services listed in the first paragraph of Article 12 of the Law, maintains a minimum equity in the amount calculated according to the third paragraph in addition to the amount calculated according to this paragraph.