Turkiye Fintech (Part 3)

The developments of fintech and digitalization in Turkey have been significant, with the fintech regulations in Turkey mostly harmonized with European Union (EU) regulations. There are around 520 fintechs in the country, with payments being the most prevalent, followed by banking and blockchain and crypto assets. The country has produced six unicorns since 2020, with Istanbul ranking 15th amongst the top 100 emerging ecosystems globally. However, there have been challenges, such as the on-going currency and debt crisis and the collapse of cryptocurrency exchanges. The government is taking steps to establish greater control over cryptocurrency in the market, which could include imposing a ‘crypto tax.’

In recent years, Turkey has seen a significant growth in the fintech sector, with many new startups emerging and established companies expanding their services. As I mentioned earlier, payments are the most popular fintech segment in Turkey, with over 200 companies offering payment solutions. This is followed by banking, blockchain and cryptocurrency, and insurance.

In addition to payments, other popular fintech segments in Turkey include money remittance and transfers, accounting and personal finance, crowdfunding, and wealth management. However, insurtech, neobanks, and peer-to-peer lending are not as prevalent due to the strict or non-existent regulations.

The Turkish government is currently working on legislation to regulate the cryptocurrency market, which could include imposing a crypto tax. The aim is to protect consumers and prevent the collapse of cryptocurrency exchanges like Vebitcoin and Thodex, which caused a loss of funds for many investors.

The Turkish fintech ecosystem is relatively new and rapidly evolving, with an estimated 520 fintech companies in the country, including 56 accredited payment and emoney fintechs and five accredited equity-based crowdfunding platforms. The government is also working on a National Fintech Strategy and a regulatory sandbox to support the growth of the sector.

Overall, Turkey’s position as a major financial center in the MEA region, combined with its unique geographical and cultural position, makes it an attractive market for fintech companies. The government’s efforts to regulate and support the sector, combined with the growing startup ecosystem, suggest that the future of fintech in Turkey is promising.