Recent Development
The Central Bank of the Republic of Turkey (the “CBRT“) enacted the Regulation on the Generation and Use of the Turkish QR Code in Payment Services (the “Regulation“), which entered into force upon its publication on the Official Gazette dated August 21, 2020 and numbered 31220.
What’s New?
Payments to be made via Turkish QR code
Pursuant to the Regulation, the Turkish QR code can be used in all transactions that fall within the scope of the Law on the Payment Systems and Securities Settlement Systems, Payment Services and Electronic Money Institutions No. 6493 (the “Payment Systems Law“) and can technically be executed via QR code.
The CBRT may determine an upper limit on payment transactions that can be made via Turkish QR Code.
The CBRT is authorized to request information and documents that it deems necessary from parties that carry out Turkish QR code transactions, such as payment service providers, system operators, and merchants. The CBRT may also conduct a physical site audit when it deems necessary.
Generation of Turkish QR Code
The Turkish QR code can be generated by payment service providers that have specific a code for the generation of Turkish QR code. In addition, payment system operators authorized by the CBRT may also generate a Turkish QR code.
The code for the generation of the Turkish QR code is determined by the Interbank Card Center (Bankalararası Kart Merkezi) (the “ICC“) and published on its website upon the request of the payment service provider and payment system operator.
Technical Rules and Principles
The Technical Rules and Principles Guideline, which also incorporate work streams relating to transactions conducted through a relevant payment system using a Turkish QR Code, are determined by the CBRT upon the system operator’s request.
Moreover, the CBRT may also issue the Technical Rules and Principles Guidelines for specific payment system methods if it deems necessary.
QR Code Routing System
The ICC established and operated the QR Code Routing System to ensure the transfer of the QR Code and the information contained therein when considered necessary for payment service procedures to be executed via Turkish QR Code. These procedures and rules, including the charges and fees are determined by the CBRT and published on its website.
Authorities and Responsibilities of Payment Service Providers
Payment service providers are obligated to ensure the generation of a QR code in accordance with the Technical Document for the payment services executed via Turkish QR code, as well as the secure conduct of these payments. The Technical Document, an annex to the Regulation, governs the rules and principles for transactions within the scope of the Payment Systems Law and conducted via a QR code.
Payment service providers are authorized to determine the upper limit of transactions. However, this upper limit cannot exceed the upper limit set by the CBRT.
During the generation of a Turkish QR code, payment service providers must take the necessary measures to ensure that the quality and readability of the Turkish QR Code of the highest extent possible and that the QR code’s integrity is maintained.
Payment service providers are responsible to ensure that payment transactions executed via Turkish QR Code are coherent with and maintain the integrity of the information in the Turkish QR Code.
Payment service providers must take the necessary measures to protect the physical security and readability of the static QR code, a QR code with fixed content and through which more than one payment transaction can be executed.
Payment service providers must incorporate provisions into framework agreements to ensure that merchants take the necessary precautions to secure the integrity of the static QR code.
For transactions executed via Turkish QR Code, payment service providers must inform payment service users that the transaction was executed, by any means appropriate (e.g. text message, application notification, etc.).
Responsibilities of Merchants
Merchants that will employ payments via Turkish QR code must inform payment service users that they allow payments via QR code.
Merchants are responsible to ensure that payment transactions executed via Turkish QR Code are coherent with and maintain the integrity of the information in the Turkish QR Code. Moreover, they shall take the necessary measures to protect the physical security and readability of the static QR code.
Necessity to use Turkish QR Code
Use of a Turkish QR Code is not compulsory for payment transactions whichmeet at least one of the following conditions:
- Use of a payment instrument issued pursuant to foreign laws;
- One of the parties being resident abroad; or
- Use of the infrastructure of a payment service provider located abroad.
Transitory Provisions
Payment service providers that enable payments via QR code must ensure compliance with the Technical Rules and Principles Guideline, if the payment service must be conducted through a payment system pursuant to the Regulations, the Technical Document, and the rules and procedures to be determined by the CBRT, by December 31, 2021 at the latest.
Payment service providers that offer merchants the opportunity to accept payments through payment cards or payment systems operated by the CBRT, must establish the infrastructure that will enable merchants to accept payments via dynamic QR code by December 31, 2021 at the latest.
If merchants use additional devices and applications in addition to payment cards or payment infrastructure provided by payment service providers, the owners of these devices and applications must also constitute the infrastructure that enables merchants to allow payments via QR code by December 31, 2021 at the latest.
The CBRT is authorized to extend the aforementioned deadlines for up to one year.
Conclusion
The Regulation and relevant rules and procedures aim to enhance the use of a common QR code in retail payments and provide payment service users with an easier, safer and more efficient way to make payments.
The Regulation enables the widespread use of contactless and electronic payment methods, which have become increasingly more important in light of the COVID-19 outbreak.
