Turkey remains a largely cash-based economy but it is seeing a marked shift towards card payments. The introduction of the country's first national payment cards system will cut payment clearance fees and fuel further growth in the financial cards market.

The launch of Troy, Turkey's first national card payment system, is set to boost the adoption of electronic payments as well as reduce the use of cash, lower inflation and tackle the black market. Turkey's ATMs, POS terminals and e-commerce sites now accept Troy transactions, according to InterBank Card Centre (BKM).

Boost to card collections

This move will boost card collections for corporates operating in Turkey, enabling retail corporates to rely on a secure national payment system with lower fees and avoid the inconvenience of processing cash.

Turkey's move from cash to cards

A report by Euromonitor states that financial cards saw strong growth in Turkey from 2010 to 2015, in step with Turkey's banked population. Government benefits and wages are increasingly being paid electronically and cards are gaining popularity with consumers.

Despite regulations during 2014 on spending limits on credit cards and some consequent slowing of growth in personal credit card volumes, spending on credit cards continued to account for the vast majority of card payment transactions in terms of value. However, there was some shift towards debit cards and commercial cards.

The cashless society

There are 171 million bank cards in Turkey, 112 million of which are credit cards. So far in 2016, $375 billion has been spent in Turkey on debit and credit cards. Despite growth in the card sector, it still only accounts for 40 per cent of payments in Turkey, the majority still using cash.

Soner Canko, chairman of BKM, says: “In 2023, our aim is to perform all transactions without any cash.”

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CTMfile take: With all the good will in the world, "cashless by 2023" seems exceedingly ambitious but we will check back in seven years, ready to eat our hat.