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PayPal to pull out of Turkey following license denial

Tue 31 May 2016

PayPal Turkey

PayPal has announced the suspension of its business operations in Turkey as of 6th June, citing failure to obtain a new license for its service in the country.

Turkey has made recent efforts to promote its own domestic tech sector, advancing censorship laws and other regulation to push large international companies out of the market. PayPal, as the latest victim on this trail, posted a statement [Turkish] on its local Turkish website today: “PayPal’s priority has always been its customers. However, a local financial regulator has denied our Turkish payments license and we have had to regretfully comply with its instruction to discontinue our activities in Turkey.” [Roughly translated from Turkish]

The denial of PayPal’s license, by local financial regulator BDDK, comes following the introduction of new national rules in Turkey which require IT systems to be based within the country itself. PayPal runs its global business from a large portfolio of IT centres around the world.

A PayPal spokesperson told TechCrunch: “We respect Turkey’s desire to have information technology infrastructure deployed within its borders, however, PayPal utilizes 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.”

The site’s closure in Turkey is expected to affect tens of thousands of businesses and hundreds of thousands of consumers.

Turkish President Recep Tayyip Erdogan has taken a strict stance on tech policy since he began office in 2014. His government has made significant moves to control social media and block sites hosting content related to terrorism, porn, drugs and illegal file sharing. This includes new legislation which makes it easier for blocks and removals to be imposed.

Twitter made a stand earlier this year, filing a lawsuit against a Turkish fine which required it to pay for not removing a number of tweets related to the Kurdistan Workers Party (PKK), deemed ‘terrorist propaganda.’


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