If you’re searching for a vibrant, future-conscious economy which is being driven by the growing demands of its large young population, you’d be hard pushed to find a country more characteristic than Turkey. 

Straddling the borders of Europe and Asia, this is an outward-looking nation committed to implementing reforms that will strengthen its democratic processes as well as its economy – both key to driving growth and putting money into its citizens’ pockets. It has been a member of the UN and NATO for several decades, and in 2005 began accession talks with the European Union. This is a country that averaged annual growth of more than 6% in the years 2002 to 2009, and whose well-regulated financial markets and banking system helped it to weather the global financial crisis, enabling its GDP to rebound strongly to 8.2% in 2010.

Turkey’s young and increasingly affluent population, which has a median age of 28 compared with the UK’s 40, provides the ideal test bed for the deployment of innovative technologies that provide real solutions. Privatization has helped the country transform itself into a more competitive economy, particularly in areas such as banking, transport and communications, which is in turn feeding the growing number of middle class entrepreneurs who now have considerable spending power.

The FTSE Group classifies it as an advanced emerging market, which combined with the fact that it has little in the way of legacy infrastructure puts it in a good position to make a technological leap direct to some of the most advanced digital solutions available.

Turkey’s telecoms network is leading the way as it undergoes rapid modernization and expansion, particularly its cellular phone services. In 2010, it supported 16.202 million land lines compared with 61.77 million cell phone subscriptions, representing an 83.51% penetration rate for the latter. Number one Mobile Network Operator (MNO) Turkcell (owned by TeliaSonera, Cukurova Group and Alfa Group) had an estimated 33.5 million subscribers in 2010. The country’s second largest MNO, Vodafone, had 16.7 million subscribers, while number three operator Avea (owned by Turkish Telecom and Türkiye İş Bankası) had 11.6. In addition to the big three, six Mobile Virtual Network Operators (MVNOs) also operate in the market, including Fenercell (owned by Fenerbahce AS) and Muhabbet Kart (owned by KVK, Medya Holding and Turkcell).

Its banking sector is also investing in the latest technologies and institutions to watch for contactless and NFC deployments include Garanti Bank, Akbank, Denizbank, Isbank and Yapi Kredi.

The 2011 contactless story

Turkey has been seen as one of the most notable European countries for contactless for some time. It has long been ahead of the curve, both in terms of contactless deployments and innovation. It was one of the first places in the EMEA region where the likes of Visa and MasterCard showcased the role that new form factors such as key fobs and contactless watches could play in creating a real wow factor around the technology. There are already an estimated 60,000-plus contactless merchant terminals in Turkey. But as this is just 3% of the country’s total of 2 million, there are still plenty of opportunities for growth.

According to Visa Europe’s 2011 Contactless Barometer survey, 79% of Turkish respondents said they believed contactless would become more commonplace than cash. MasterCard Worldwide’s research was similarly upbeat about the technology. Its Tech Nation poll of a spread of European countries revealed that Turkey – along with Russia – topped the table of tech savvy nations with 13% of Turks currently using mobile payment technologies, well ahead of the UK’s figure of just 6%.  Contactless was also popular in the country with 10% of the population using the technology. In addition, the research revealed that Turkey had waved goodbye to the check with only 4% of people still using it as a payment method, compared with 75% in France and 56% in the UK.

Last year, Turkey reinforced its enthusiasm for the technology with a series of announcements that ensured it remained a global leader for contactless deployments.

Turkcell, its top MNO and an aggressive proponent of NFC, has been behind a series of big announcements over the past year. It teamed up with SmartSoft and Plaskart to unveil Europe’s first MNO Trusted Service Manager (TSM) mobile solution for NFC payments approved by MasterCard. This collaboration made Turkcell Europe’s first cell operator to successfully launch and commercialize an approved MasterCard TSM solution.

It also signed up Yapi Kredi for the commercial launch of its contactless mobile wallet system, known as Cep-T Cüzdan. Subscribers need either an NFC-enabled SIM from Gemalto or to attach an antenna add-on to their handset to turn it into a credit card, a toll pass card or even a concert ticket. Other organizations involved in schemes with the Turkish giant include Garanti, Akbank, Bank Asya, DenizBank and Finansbank.

Last year saw it begin testing an NFC-based meal voucher on its T20 Android cell phone with around 50 employees; this enabled them to pay for food with prepaid meal vouchers loaded onto the phone’s SIM card.

Turkcell has ambitions for further NFC rollouts in 2012 that involve the T20, manufactured by Huawei. The MNO has launched Android NFC cell phones for its mobile wallet, including the T11, manufactured by ZTE. The operator says it plans to expand its mobile wallet services beyond payment, to loyalty, transit and other ticketing applications.

Other payments schemes that made progress in 2011 include the Visa and Akbank-backed trial of contactless microSDs which involved an estimated 2,000 users and 32,000 merchants.

One of Akbank’s competitors, Garanti Bank, also took a bold step forward. It rolled out VeriFone’s NFC/contactless systems as part of its nationwide integration of an NFC SIM mobile payment program. This followed Garanti and MNO Avea’s move from pilot phase to general commercial availability of cell phone-based NFC payments.

In the transport sector, contactless has made inroads in several cities including Istanbul and İzmir. In Istanbul, NXP Semiconductor’s MIFARE DESFire EV1 contactless microcontroller is being used to power Istanbulkart, the city’s new contactless fare payments system for public transit.

One of the transit highlights of 2011 was the rollout of the ground-breaking Esparacard public transport project in the north-western city of Eskisehir. This used MasterCard M/Chip Advance and ticketing technology from Ingenico. The project was the result of a collaboration between several major financial and local government bodies including Garanti Bank, Eskisehir Metropolitan Municipality, MasterCard, Asis and ILFER. The Esparacard is a pre-paid card with both contact and contactless features; it is also part of MasterCard M/Chip Advance Worldwide’s new payment platform used in transportation. The ticketing system allows the money loaded on the Esparacard to be used not only for travel but also to pay for goods and services at other merchants accepting MasterCard. In addition, the system includes special applications such as enabling users to travel on different means of public transport free of charge within one hour of the start of their journey.

Another launch of note was Bank Asya’s microSD-based payment service, DIT Mobil, which it rolled out in partnership with Watchdata. The system can be used in all EMV contactless terminals including Bank Asya’s bus validators, ferry turnstiles, taxis, KGS tollway gates and more.


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