PayPal customers in Turkey will no longer be able to receive or send money as of June 6

[DomainBop]

PayPal customers in Turkey will no longer be able to receive or send money as of June 6, 2016 (only 1 week's notice was given) because Turkish regulators have rejected PayPal's license. This is going to hit any hosting company hard that is either located in Turkey or has customers in Turkey.  TL;DR PayPal is no longer an option for 75 million people...

Türkiye’deki Müşterilerimiz İçin Önemli Bilgilendirme
PayPal olarak Türkiye’deki faaliyetlerimizi durdurduğumuzu üzülerek bildirmekteyiz.
6 Haziran 2016 tarihinden itibaren geçerli olmak üzere Türkiye’deki müşterilerimiz PayPal hesapları üzerinden para gönderme ve alma işlemi yapamayacaklardır.  Müşterilerimiz PayPal hesaplarına giriş yapabilir ve varsa hesaplarındaki bakiyeyi Türkiye’deki banka hesaplarına aktarabilirler.
Belirtmek isteriz ki, PayPal’ın önceliği her zaman müşterileri olmuştur. Ancak yerel düzenleyici kuruluşa yaptığımız lisans başvurusunun reddi ve ilgili kurumun Türkiye'deki faaliyetlerimizi durdurma talimatı doğrultusunda uygulamak durumunda olduğumuz bu karardan dolayı üzüntü duymaktayız.
Müşterilerimiz bilgi sayfasını ziyaret ederek bu sürecin kendilerini nasıl etkileyeceğine ilişkin detaylı bilgi alabilirler.
PayPal olarak tüm müşterilerimize bugüne kadar bizi tercih ettikleri için  teşekkürlerimizi iletmek isteriz. PayPal'a vermiş olduğunuz destek Türkiye'deki çalışanlarımız ve şirketimiz için her zaman önemli olmuştur.
Gelecekte Türkiye'deki müşterilerimize yeniden hizmet verebilmek için gerekli izinlerin alınması yönündeki çalışmalarımız devam edecektir.

Google translate (if google spent half the time working on fixing its translation services that it does harvesting users data ...):

Important Information for Customers in Turkey
We report with regret that we stopped our activities in Turkey as PayPal.
Customers in Turkey since June 6, 2016, to be effective sending and receiving money via a PayPal account will not do the. Customers can log in to your PayPal account balance in the account, and if they can transfer to a bank account in Turkey.
We want to indicate that PayPal's priority has always been customers. We did however local regulatory agencies rejection of license applications and we have to apply the relevant institutions in accordance with the instruction to stop our activities in Turkey, we regret because of this decision.
Customers that process information by visiting the page can get detailed information on how they will affect you.
so far all of our customers as we would like to convey our thanks to PayPal to us that they prefer. Our employees at PayPal and support you have given Turkey has always been important to our company.
Our efforts in obtaining the necessary permissions to provide services to our customers again in the future, Turkey will continue.

PayPal  has some FAQs on this decision (in Turkish) for its Turkish customers here: https://www.paypal.com/tr/home

 

[DomainBop]

Edited to add: this is bad news for people in Turkey but I'm wondering if the Turkish government might be trying to give an edge to Iyzico, a Turkish online payments company whose venture funding backers including the investment arm of World Bank. Iyzico recently beat out PayPal and Stripe for a contract to provide payment services to Iranian merchants and customers.

 

[wlanboy]

I don't like Ebay but Paypal is an alternative for some people not able to get a credit card. 


PS:
Family planning will be banned too: http://www.telegraph.co.uk/news/2016/05/30/family-planning-not-for-muslims-says-turkeys-president-erdogan/

 

[RLT]

Personally I prefer to use PayPal period. I don't like giving card details to unknown hosts.

 

[Licensecart]

I've contacted our effected clients, but this is stupid, BRSA should understand PayPal opens up the world, and to think they are thinking of joining the EU (well applying). Maybe PayPal will be able to go back into Turkey if it joins the EU.

 

[DomainBop]

I've contacted our effected clients, but this is stupid, BRSA should understand PayPal opens up the world, and to think they are thinking of joining the EU (well applying). Maybe PayPal will be able to go back into Turkey if it joins the EU.

( I cross posted the following on WHT )


Based on a few news reports this morning, It's also partly PayPal's fault because if you want to do business in a country you need to comply with all regulations which PayPal hasn't done yet. Turkey wants to regulate online payment providers like PayPal under their banking laws and one of the requirements to obtain a license is that the company must have servers and offices located within Turkey. PayPal doesn't have servers in Turkey. (some what off topic: but I'm sure another one of the reasons for the server requirement is it's also easier for Turkey to enforce censorship and control the population if the servers are located within the country)
 

 

[DomainBop]

English language copy of the Turkish law governing payment services and electronic payment providers:  "LAW ON PAYMENT AND SECURITY SETTLEMENT SYSTEMS, PAYMENT SERVICES AND ELECTRONIC MONEY INSTITUTIONS Law No. 6493"


https://www.bddk.org.tr/websitesi/english/Legislation/129166493kanun_ing.pdf <--BDDK is the Turkish banking regulator


Article 23 of the law TL;DR;  information systems and data storage need to be located in Turkey

ARTICLE 23 – (1) The system operator, payment institution and electronic money institution shall keep the documents and records related to the issues mentioned on this Law for a period of minimum ten years at a safe place offering access anytime desired in the country. The system operator, payment institution and electronic money institution shall keep the information systems used for conducting the activities and their backups within the country

^^ the date of enactment of that law was June 20, 2013 and it was published in the official gazette on June 27, 2013  so you'd think PayPal probably knew what was coming and could have given its users more notice than 7 days or at least a warning that if it couldn't  meet the requirements for obtaining a license it might be forced to pull out of the country (especially since the number of Turkish PayPal customers impacted is sizable: according to TechCrunch, "tens of thousands of businesses and hundreds of thousands of consumers."

 

[DomainBop]

Just thought I'd update this...2Checkout  (as of June 24, 2016) and Skrill (as of Jul 1, 2016) both announced this month they will be discontinuing operations in Turkey so there is not much left for smaller Turkish sellers with international customers unless they get a merchant account or incorporate their business outside Turkey.  


This site has a chart of 3rd party payment processors market share in Turkey prior to this month's closings: PayPal 88.99%, Stripe 2.36%, Avangate 1.12%, 2Checkout 0.9%, Paymentwall 0.79% , the rest


full chart and analysis: https://www.datanyze.com/market-share/payments/Turkey/2checkout-market-share

 

[KuJoe]

( I cross posted the following on WHT )


Based on a few news reports this morning, It's also partly PayPal's fault because if you want to do business in a country you need to comply with all regulations which PayPal hasn't done yet. Turkey wants to regulate online payment providers like PayPal under their banking laws and one of the requirements to obtain a license is that the company must have servers and offices located within Turkey. PayPal doesn't have servers in Turkey. (some what off topic: but I'm sure another one of the reasons for the server requirement is it's also easier for Turkey to enforce censorship and control the population if the servers are located within the country)
 

From what I've read, Turkey requires ALL servers to be located within Turkey, not just some. The regulations are specifically targeted to keep the financial companies within Turkey's jurisdiction and preventing outside companies from having any influence in their citizen's finances. PayPal, being a private company, refuses to be under the control of Turkey's government which is what will happen if PayPal moves all of their infrastructure to Turkey. I was researching this and found that a lot of people are losing their jobs because of this change. There's a thread on Etsy's forums about this and people who's families rely on the income from their online stores are trying to find ways to be able to afford to move out of Turkey so they can continue to make money to feed their family and have a roof over their head. Imagine having to move to another country just to continue operating the same business you've been running for years and avoid being homeless. It's sick that the government is forcing these kinds of changes that do not benefit the average citizen at all.

 

[drmike]

The average citizen in Turkey like all other countries doesn't engage in international commerce.  It is a small subset of the population that gets wrecked by something like this.  Otherwise there would be national insurrection and rioting.


Just think of all the new opportunities for entrepreneurs in Turkey to start up payment companies.

This site has a chart of 3rd party payment processors market share in Turkey prior to this month's closings: PayPal 88.99%, Stripe 2.36%, Avangate 1.12%, 2Checkout 0.9%, Paymentwall 0.79% , the rest

90%+ of the 3rd party payment processors were non-domestic.


How will this impact Bitcoin?  Not at all?

 

[DomainBop]

Just think of all the new opportunities for entrepreneurs in Turkey to start up payment companies.

There is the 4-yr-old Iyzico which has received some VC investment (including from the World Bank) and integrates with virtually all ecommerce software (like Magento, OpenCart,  Prestashop, and many others. There is also a WHMCS module) .   From the looks of it though the target market is domestic buyers so it may not be user friendly for international buyers (translation: I'm too lazy tonight to read through all of their documentation to see what hurdles an international buyer would have to go through).


There is also a long list of prohibitions, including any website that accepts Bitcoin as a payment method.  Web hosting services are one of two type of merchants (the other is auction sites) that must go through a review process before they will be accepted by Iyzico as a merchant. 


The big obstacle with any alternative payment system though is getting customers to use it.  Outside of Turkey (and now Iran) Iyzico is unknown with buyers which means getting them to use it or any other alternative payment system will be a struggle (an example would be, if you run a Chinese or African website, try offering only Alipay or M-Pesa as payment options and see how many US or European customers make a purchase...probably not many)

. Imagine having to move to another country just to continue operating the same business you've been running for years and avoid being homeless.

This is going to sound really harsh and really cold (and I really sympathize with what people are going through) but from personal experience (business surviving the DotCom crash) when business conditions change you need to adapt quickly to changing times if you hope to survive...trying to continue to operate the same way "you've been running for years" will only get you killed if you run a business.  


Refocusing marketing efforts on that large domestic market of 75 million people until market conditions for conducting international commerce become favorable again  is probably the only way many smaller Turkish online businesses that were reliant on PayPal/2CO, etc are going to make it through this and be able to continue to put food on the table.  Will making the necessary changes be easy? No, but the alternative of not changing your business plan isn't really an option for people at this point.

 

[KuJoe]

This is going to sound really harsh and really cold (and I really sympathize with what people are going through) but from personal experience (business surviving the DotCom crash) when business conditions change you need to adapt quickly to changing times if you hope to survive...trying to continue to operate the same way "you've been running for years" will only get you killed if you run a business.  


Refocusing marketing efforts on that large domestic market of 75 million people until market conditions for conducting international commerce become favorable again  is probably the only way many smaller Turkish online businesses that were reliant on PayPal/2CO, etc are going to make it through this and be able to continue to put food on the table.  Will making the necessary changes be easy? No, but the alternative of not changing your business plan isn't really an option for people at this point.

It's not that easy though. These companies were given about a weeks notice from PayPal before their accounts were "restricted" (withdraw only) and marketing their services/products locally will not produce the same income they are getting from countries like the US where disposable income and exchange rate (1 USD = ~3 TL) are much higher. I could understand if the business conditions changed gradually or became tougher, but in this case the people in Turkey were given 7 days to completely change their company into something different all so that the Turkish government could have more control over their citizens and their money. We're also not talking about a hosting provider or anything where innovation is key to surviving, we're talking about people who manufacture things and sell them online. They can't just change their widgets or how they make them or how the ship them, they need to change who is buying them and how to get paid. The DotCom bubble sucked for a lot of people but this wasn't something caused by an outside entity who wanted to control DotCom startups.

 

[RosenHost]

We are one of those small Turkish companies that this crisis affected. We are in business since 2009 and PayPal was our only payment gateway. Skrill and 2CO also leaving, we are yet to find any alternatives. As stated above, Turkish start up iyzico is nothing as good as PayPal, has so many conditions for web hosts and personally owned businesses. Fees are also too high compared to PayPal. Currently we have initiated BitPay as an alternative payment method.


We are looking for ways to move our company to another country. Weird things are happening here. Governmental regulations are ruining businesses in every way possible. International trade is becoming harder each day. 

 

[DomainBop]

We are looking for ways to move our company to another country. 

UK company/UK registered office/UK bank account would be my recommendation just because the startup costs are low, all filings/paperwork can be done online, and Company House usually approves new companies within 1-2 business days so you could be accepting payments again soon.   UK Taxes (20% this year, 19% next, 18% in 2018) are about mid range for the EU. My recommendation for company formation/registered office: the same one everyone uses, Companies Made Simple (they can also help with getting a Barclays or TSB business account).  Getting the money the money from your UK company bank account to you in Turkey would require an extra step (and probably cost), but it would be easier and much faster than physically moving to another country..

 

[DomainBop]

UK company/UK registered office/UK bank account would be my recommendation just because the startup costs are low, all filings/paperwork can be done online, and Company House usually approves new companies within 1-2 business days so you could be accepting payments again soon.   UK corporate taxes (20% this year, 19% next, 18% in 2018) are about mid range for the EU. My recommendation for company formation/registered office: the same one everyone uses, Companies Made Simple (they can also help with getting a Barclays or TSB business account).  Getting the money from your UK company bank account to you in Turkey would require an extra step (and probably cost), but it would be easier and much faster than physically moving to another country..

 

[drmike]

We are one of those small Turkish companies that this crisis affected. We are in business since 2009 and PayPal was our only payment gateway. Skrill and 2CO also leaving, we are yet to find any alternatives. As stated above, Turkish start up iyzico is nothing as good as PayPal, has so many conditions for web hosts and personally owned businesses. Fees are also too high compared to PayPal. Currently we have initiated BitPay as an alternative payment method.


We are looking for ways to move our company to another country. Weird things are happening here. Governmental regulations are ruining businesses in every way possible. International trade is becoming harder each day. 

How common are companies like yours in Turkey? (companies that do business abroad and depend on these non domestic gateways)


Are your countrymen revolting over the sudden changes?  Protesting?  Activism? Political involvement?


This change reminds me of what they did in Cyprus and reminds me of the controlled collapse of the US economy many times since Dotcom boom of late 90's.

 

[RosenHost]

@DomainBop thanks for the recommendation. I have saved the link. I am actually planning on moving my business to Georgia. I will not move there physically, but Georgia is one of the best countries to start a new business according to my research. Paperwork is very low, and a company can be founded in a few days. Getting a bank account is also easier as far as I can see. However, I will keep your recommendation in mind. 


@drmike yes there a lot of businesses and sole proprietorship in this condition. Also people selling local and traditional stuff on ebay are in a bad situation. On RosenHost, we are selling internationally. Of our near a thousand clients, only 13 are Turkish clients. Rest of the clients were international and being the most widely used payment gateway, PayPal was boosting our business and helping us get payments.


I am not planning to move to another country physically. At least in a near future. It also is not easy for Turkish people due to Visas and other regulations. Turkey is being more like a dictatorship each day. Ruling party gets more authoritarian by time and there is no power domestically to stop them. Back in 2013, there was huge protests (Gezi Protests) all over the country. Government used violent police and military force to silence the protests and many people lost their lives. Since then, streets are silent. Protests are rare. Out of 3 opposition partys, 2 is dealing with internal problems. (Nationalists and Republicans). Third opposition party is usually interested with Kurdish Political movement and nothing else. Erdogan, head of the country is losing his support internationally. However, he still has strong support in Turkey and still wants to change the constitution. 


This is not a country to spend a holiday or make business. Not anymore. Security is very low. ISIS and other kind of jihadists are all around. Everything seems to be getting Arabic and Islamic. Doing business is ridiculously hard. Taxes are insane for a normal human being and corruption is at its best. For now, I will just move my hard earned business out. In the future, I will look for ways to run away.

 

[RosenHost]

UK company/UK registered office/UK bank account would be my recommendation just because the startup costs are low, all filings/paperwork can be done online, and Company House usually approves new companies within 1-2 business days so you could be accepting payments again soon.   UK Taxes (20% this year, 19% next, 18% in 2018) are about mid range for the EU. My recommendation for company formation/registered office: the same one everyone uses, Companies Made Simple (they can also help with getting a Barclays or TSB business account).  Getting the money the money from your UK company bank account to you in Turkey would require an extra step (and probably cost), but it would be easier and much faster than physically moving to another country..

How common are companies like yours in Turkey? (companies that do business abroad and depend on these non domestic gateways)


Are your countrymen revolting over the sudden changes?  Protesting?  Activism? Political involvement?


This change reminds me of what they did in Cyprus and reminds me of the controlled collapse of the US economy many times since Dotcom boom of late 90's.

UK company/UK registered office/UK bank account would be my recommendation just because the startup costs are low, all filings/paperwork can be done online, and Company House usually approves new companies within 1-2 business days so you could be accepting payments again soon.   UK Taxes (20% this year, 19% next, 18% in 2018) are about mid range for the EU. My recommendation for company formation/registered office: the same one everyone uses, Companies Made Simple (they can also help with getting a Barclays or TSB business account).  Getting the money the money from your UK company bank account to you in Turkey would require an extra step (and probably cost), but it would be easier and much faster than physically moving to another country..

@DomainBop thanks for the recommendation. I have saved the link. I am actually planning on moving my business to Georgia. I will not move there physically, but Georgia is one of the best countries to start a new business according to my research. Paperwork is very low, and a company can be founded in a few days. Getting a bank account is also easier as far as I can see. However, I will keep your recommendation in mind. 


@drmike yes there a lot of businesses and sole proprietorship in this condition. Also people selling local and traditional stuff on ebay are in a bad situation. On RosenHost, we are selling internationally. Of our near a thousand clients, only 13 are Turkish clients. Rest of the clients were international and being the most widely used payment gateway, PayPal was boosting our business and helping us get payments.


I am not planning to move to another country physically. At least in a near future. It also is not easy for Turkish people due to Visas and other regulations. Turkey is being more like a dictatorship each day. Ruling party gets more authoritarian by time and there is no power domestically to stop them. Back in 2013, there was huge protests (Gezi Protests) all over the country. Government used violent police and military force to silence the protests and many people lost their lives. Since then, streets are silent. Protests are rare. Out of 3 opposition partys, 2 is dealing with internal problems. (Nationalists and Republicans). Third opposition party is usually interested with Kurdish Political movement and nothing else. Erdogan, head of the country is losing his support internationally. However, he still has strong support in Turkey and still wants to change the constitution. 


This is not a country to spend a holiday or make business. Not anymore. Security is very low. ISIS and other kind of jihadists are all around. Everything seems to be getting Arabic and Islamic. Doing business is ridiculously hard. Taxes are insane for a normal human being and corruption is at its best. For now, I will just move my hard earned business out. In the future, I will look for ways to run away.