In a move that will affect hundreds of thousands of consumers and thousands of businesses, PayPal says that it is shutting down in Turkey next week after local regulators rejected its license applications. In a notice on its site, the global giant says that from 6 June it will cease its activities in Turkey and that customers will not be able to send and receive money via their PayPal accounts. Balances can be moved to Turkish bank accounts.
PayPal says that it has been forced into suspending payment processing after its payment license application was denied by the financial regulator, BDDK. The US-based company told TechCrunch that the license was denied because of a new rule in Turkey that requires IT systems to be based in the country.
“We are sorry to announce that PayPal is suspending its business operations in Turkey,” the company noted in a written note. “Effective from June 6, 2016, our customers in Turkey will no longer be able to send or receive funds with PayPal. Customers will still be able to log in to their PayPal accounts and withdraw any balance on their accounts to a Turkish bank account.
“Supporting our customers is very important to PayPal. However, we have no choice but to suspend processing payments in Turkey as our application for a Turkish payments license has been denied by the local financial regulator and we have been instructed to suspend our Turkish business operations.”
Asked why the license was denied, the spokesperson said that it was a result of new rules that require IT systems to be localized in the country. PayPal distributes its IT across several global hubs.
“Our suspension of services is a result of new national regulations overseen by the BDDK that require PayPal to fully localize our information technology systems in Turkey,” the spokesperson said. „We respect Turkey’s desire to have information technology infrastructure deployed within its borders, however, PayPal utilises a global payments platform that operates across more than 200 markets, rather than maintaining local payments platforms with dedicated technology infrastructure in any single country,” PayPal told TechCrunch.
Despite this, the company says it is working towards obtaining the permits needed to start operating again, although it has provided no indication of when this might be.
Source: techcrunch.com
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