Türkiye suspends PayPal services, can Bitcoin fill the gap?

Author: Velvet Gold Mine

PayPal has been forced to suspend its services in Turkey, which will be officially implemented on June 6. Turkey has previously denied PayPal a new license to operate in the country. According to TechCrunch, the reason for the forced suspension is that PayPal refused to localize its IT architecture.

To find out what exactly happened, Bitcoin Magazine interviewed Emre Kenci, the owner of Turkish Bitcoin exchange BTCTurk.

Will other online payment service providers also stop services in Turkey?

According to Kenci, the regulations on PayPal may also apply to other payment processors, but "companies like Western Union will be exempted."

"In Turkey, if a platform holds customer account funds and provides money transfer services, it needs to obtain an e-money license," Kenci said. "If it does not involve money transfers but only accepts payments, it needs a payment processor license. E-money license holders can also provide payment services. Therefore, the latter license service scope includes a payment processing license."

Kenci also said that the suspension was not only due to the regulator's requirement for localization of IT architecture. "In Turkey, there are specific regulations for everything from CEO changes in the company structure to how the platform puts funds in bank accounts and how financial security audits meet regulatory requirements."

Such rules also restrict the development of many small businesses and innovative ideas.

As for Kenci’s own platform, he did not disclose whether the regulation would affect the operation of BTCTurk. “The scope of this regulation is to stop or allow the transfer of currencies identified by the Turkish Central Bank.” He explained, “The regulator believes that Bitcoin is not within the scope of this restriction.”

Can Bitcoin Help the Development of International Money Transfers?

Despite all the hype surrounding Bitcoin’s use in international money transfers and payments, real data in this area shows that it is not widely used. Commonly used platforms such as SWIFT are a popular international remittance platform that usually handles transactions greater than $1,000.

"Turkish banks are very efficient and digital channels (mobile and online) are well developed, which makes its transfer costs lower than the international average," Kenci said.

"Remittance companies like Western Union are also very well established and almost every bank supports their services."

What role can Bitcoin play?

PayPal’s business in Türkiye is mainly focused on small transfers and digital payments. “We believe this is a great opportunity for Bitcoin to grow in Türkiye.”

Although Kenci said that PayPal's suspension may help the development of Bitcoin in Turkey, he also added that given the current maturity of Bitcoin services in Turkey and other countries in the world, it is almost impossible to fill the gap left by PayPal. "But for Turkey, which used PayPal, they will have to find an alternative."

As for where Bitcoin will take off, Kenci explained: “Our interest in Bitcoin started when we saw the shortcomings of the existing financial system, strict capital controls, and a loss of confidence in national currencies.”

Kenci said that Turkey's financial system is relatively sound and solid, and despite the fluctuations it experienced last year, many people still have confidence in the Turkish currency, the lira.

JPM compiled from

Bitcoin Magazine, What Does PayPal`s Shutdown in Turkey Mean for Bitcoin? , by Kyle Toprey.