In 2023, Turkey's e-commerce sector embraces a rich payment palette. Cards lead the charge, capturing a significant market share. Visa, Mastercard, and Troy reign supreme, bolstering trust in card transactions. Local cards like Advantage and Axess also play pivotal roles.
Conversely, Cash on Delivery (COD) appeals to the traditionalist. It provides a bridge to the digital realm for those cautious of online payments.
Bank transfers emerge as reliable digital conduits. The Central Bank of the Republic of Turkey (CBRT) drives this forward with its FAST system, showcasing a leap in real-time payment platforms. Local players like Fast and PeP are right behind, easing bank transfer transactions.
The "Buy Now, Pay Later" (BNPL) wave sweeps in, offering a taste of financial flexibility. It resonates well, especially with younger consumers valuing convenience. Local entities like Colendi and Garanti Pay are at the helm, aligning with this global trend.
Digital wallets carve a significant niche, with BKM Express and GPay leading the charge. They rank alongside cards, showcasing a promising growth trajectory. Numerous apps like Papara and Paycell contribute to this digital wallet momentum, indicating a strong inclination towards modern payment methods.
In summary, Turkey's e-commerce sector in 2023 showcases a blend of traditional and modern payment channels, all set against a backdrop of evolving consumer preferences and technological advancements.
Payment by card in Turkey
In 2023, credit and debit cards hold the crown as the primary conduits for e-commerce transactions in Turkey, snaring nearly 60% of the market according to Pay1. Around 86% of consumers exhibit a penchant for credit cards during their online shopping endeavors2. This trend underscores the deep-rooted trust and convenience tethered to card payments in the Turkish e-commerce arena.Major credit cards like Visa and Mastercard find widespread acclaim among Turkish shoppers. Besides the international giants, Troy, Turkey's domestic card scheme, enters the stage. Established in 2015 by a consortium of 13 banks under the aegis of the Interbank Card Center, Troy aims to bolster card usage and acceptance across Turkey 45.
Payment by cash
In 2023, Cash on Delivery (COD) holds a unique spot in Turkey's e-commerce sector, accounting for 7% of transactions123. This method permits customers to pay cash upon receiving their online purchases. It appeals to individuals preferring physical transactions or those wary of online payment security.The preference for COD blends traditional payment tastes with modern e-commerce practices. Despite the rising popularity of digital payments, a segment of the Turkish populace clings to cash transactions. Notably, COD transactions have risen from 3% in 2016 to 7% in 2023, showcasing a sustained preference over the years2.Offering COD as a payment option bridges the digital divide. It lends a touch of traditional transactional assurance to those exploring online shopping. Additionally, it provides an avenue for those lacking access to digital payment methods or those hesitant to employ them online.The enduring presence of cash in e-commerce, through COD, emphasizes the necessity of diverse payment options. It caters to varying consumer preferences and circumstances in Turkey's evolving e-commerce scene, ensuring an inclusive online shopping experience for all.
Payment by bank transfer
In 2023, bank transfers mark a crucial facet of Turkey's e-commerce scene, accounting for about 11% of online payments1. They stand as a reliable digital payment avenue, especially for those lacking access to credit or debit cards. Moreover, they offer instant payment, reducing the risk of chargebacks or declined payments significantly.The Central Bank of the Republic of Turkey (CBRT) spearheads the instant payment innovation with its Instant and Continuous Transfer of Funds (FAST) system. This system facilitates 24/7 instant transfers, wrapping up transactions in less than a second between customer accounts23. On an average day, the FAST system processes around 3.5 million payments, showcasing its robust capability.Distinctly, the FAST system operates independently from the Electronic Fund Transfer System (EFT), another brainchild of CBRT. It stands as a real-time payment platform, allowing customers to send payment orders round the clock via system participants4. This innovation significantly boosts the real-time processing capabilities, enhancing the overall efficiency of bank transfers in e-commerce.
Payment by installment and BNPL
In 2023, flexible payment options like "Buy Now, Pay Later" (BNPL) and installment payments are catching on globally, with Turkey being no exception1. These methods offer an attractive alternative to upfront payments. BNPL, for instance, allows customers to split their payments, providing a form of interest-free credit that resonates well with younger consumers who value convenience1.Historically, Turkish e-commerce platforms have welcomed installment payments. Many brands offered such plans to entice customers and simplify the purchasing process2. This trend is not new; it mirrors a global shift towards more flexible payment solutions.These flexible payment methods align with the digital transformation enveloping the retail and e-commerce sectors. They cater to modern consumer preferences, offering a blend of immediacy and financial flexibility. The positive trajectory of BNPL and installment payments is likely a response to evolving consumer needs and the broader global shift towards accommodating payment solutions in the digital commerce sphere.
Payment by digital wallet and X-Pay
In 2023, digital wallets make a significant mark in Turkey's e-commerce sector. Over half of the population uses mobile payment apps for transactions. Dominant players like BKM Express and GPay lead the industry1. Digital wallets rank among the top payment methods in Turkey, alongside credit/debit cards, bank transfers, and cash2.Several digital wallet apps thrive in Turkey. Notable ones include Papara, Paycell, iyzico, Moka, PayTR Mağaza, Payby.me, and Payoneer. They cater to various needs such as online shopping, in-store payments via QR codes, and bill management. Additionally, they offer features like virtual cards and fraud prevention, ensuring a secure user experience3.BKM, the Interbank Card Center of Turkey, launched an "express" digital wallet platform. This move aims to streamline e-commerce transactions for cardholders4. In 2021, nearly 70% of e-commerce purchases were made via mobile apps, showcasing a growing trend. The domestic card payment scheme TROY also gains traction, alongside Visa and Mastercard, for online transactions5.The Turkish Prepaid Card and Digital Wallet Market holds an estimated value of $11.9 billion in 2023. It is projected to grow at a rate of 12.8%, potentially reaching $19.2 billion by 20276.According to BKM, a collaboration of public and private banks in Turkey, 56% of the population uses a mobile payment app, indicating a strong preference for digital wallet usage7.
