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E-Wallet Market in Turkey

Delivered July 17th, 2019. Contributors: Deepa V., Daisy, Dagmawit W. and

Research Outline: E-Wallet Market in Turkey
Part
01
of three
Part
01

EWallet Demographics in Turkey

The e-wallet users in Turkey are mostly young people and men. Majority of e-wallet users in Turkey are also rich people, and among the digital account owners, the use of digital payments is equal among both male and female account owners.

GENERAL INFORMATION

  • E-wallet services account for only 11% of all payment processing methods in Turkey.
  • Turkish customers use cash for micropayments such as fresh markets or taxi.
  • Rural farmers in Turkey prefer cash to digital payments.
  • The unbanked population in Turkey is 31% of the country's adults.

E-WALLET IN TURKEY

  • The major players in the e-wallet sector in Turkey are BKM Express, GPay, Mobilexpress, Papara, and Pay Cell.
  • GPay and Turkcell have made major investments in e-wallets in Turkey.
  • According to BKM, a partnership of public and private banks in Turkey, 56% of the population in Turkey uses a mobile payment app.
  • Seventeen banks in Turkey support BKM Express e-wallet, and it has 1.4 million users.
  • Since the launch of BKM Express e-wallet in Turkey in 2012 to May 2017, 21,000 retail members did 3.8 million transactions through it.

DEMOGRAPHICS OF E-WALLET USERS IN TURKEY

ECONOMIC STATUS:

  • Rich people who have bank accounts are 20% more than poor people who have bank accounts in Turkey, and this could reflect in the e-wallet customer demography as well.

GENDER:

  • E-wallet users in Turkey are mainly men because more than 60% of women in Turkey remain unbanked.
  • Among the bank account owners in Turkey, the use of digital payments is equal among both male and female account owners.

AGE:

  • According to Payments Cards & Mobile, globally, just below half of the smartphone users in the age group, 18-34, have an e-wallet.
  • Also, globally, 44% of 35-44 age group smartphone users have an e-wallet.
  • In total, about half of the global smartphone users aged between 18 and 44 have e-wallets.
  • According to MEDICI, half of the Turkish population is under the age of 31.
  •  Majority of e-wallet users in Turkey are young people.

PERCEPTIONS:

  • According to a 2016 study by Gokhan Aydin, users of e-wallets in Turkey perceive themselves as more innovative than non-users, there is nil or shallow social influence on use intentions of e-wallets, and low-security concern among the users of e-wallet in Turkey.

RESEARCH STRATEGY

In our search for the demographics of consumers of e-wallet services in Turkey, we first found a SlideShare presentation, which stated that the major players in the e-wallet sector in Turkey are BKM Express, GPay, Mobilexpress, Papara, and Pay Cell. However, SlideShare, as a source, has very low credibility. Still, as no other source was so far available, we decided to use this information as a starting point by trying to find out the customer demographics of the five e-wallets listed by SlideShare. According to a blog by Wirecard, one of the biggest payment infrastructures of Europe, GPay and Turkcell have made major investments in e-wallets in Turkey. Hence, we also included Turkcell in the list to look for customer demographics.

BKM Express is the e-wallet operated by BKM, a partnership of public and private banks in Turkey. According to a BKM report, 56% of the population in Turkey uses a mobile payment app, 17 banks in Turkey support BKM express e-wallet, and it has 1.4 million users. The report also states that since the launch of BKM Express e-wallet in Turkey in 2012 to May 2017, 21,000 retail members did 3.8 million transactions through it. Also, according to the report, almost all online Turkish people have a Facebook account, and hence, it is assumed that the e-wallet users in Turkey have Facebook accounts.

We also found a report by PYMNTS.com stating that Turkish customers use cash for micropayments such as fresh markets or taxi and that rural farmers prefer cash to digital payments.

Furthermore, the Global Findex Database 2017, published by The World Bank, offered some demographic information on the bank account holders and those who use digital transactions in Turkey. According to the report, there is a 20% difference between the poor and the rich in Turkey when it comes to bank account ownership. The e-wallet users have to be bank account holders, primarily. Hence, it is assumed that e-wallet users in Turkey are mostly categorized as rich. The report also states that women make up more than 60% of unbanked adults in Turkey. Hence, it is assumed that the e-wallet users are mainly men. However, the report also informs that among the bank account holders in Turkey, there is equal use of digital payments by men and women.

Independent searches of each major e-wallet companies, as identified above, did not yield any customer demographic details. As we also could not find any precompiled demographic information on general Turkish e-wallet customer demographics, we tried using the Turkish translation of relevant keywords to search industry-related Turkish websites and newspapers, but no useful results came up. Market intelligence agencies such as PR Newswire and Business Wire have published reports on the Turkish e-wallet market, and these reports could have customer demographics. However, these reports are paywall protected. Hence, we tried broadening the research scope by finding the global demographics of e-wallet users and apply that to Turkish customers. However, the social situation in Turkey, for example, as reflected in the statistic that more 60% of Turkish women remain unbanked, make it challenging to apply the global data to the Turkish scenario. Still, we have used the fact that globally, the majority of e-wallet customers belong to the 18-44 age group, as a corroborating statistic to conclude that Turkish e-wallet customers are mainly young people.

According to Payments Cards & Mobile, globally, just below half of the smartphone users in the age group, 18-34, have an e-wallet, and 44% of smartphone users in the 35-44 age group have an e-wallet. In total, about half of the global smartphone users aged between 18 and 44 have e-wallets. A report by MEDICI also supports this assumption stating that half of the Turkish population is under the age of 31. By triangulating using the information above, it is assumed that a significant portion of e-wallet users in Turkey could be young people.

Note, however, that we could not find any demographic data about the education and employment of e-wallet customers in Turkey. Although we broadened our search to global e-wallet customers, the global e-wallet customer research reports by agencies such as Nielsen, McKinsey, Market Research Future and JP Morgan did not provide any details on customer education or employment. Business magazines such as Forbes, Fortune, and The Economic Times, as well as news reports on global e-wallet customers, also did not provide data on global e-wallet customer education and employment.
Part
02
of three
Part
02

EWallet Providers In Turkey

Three well-known Turkish e-wallet services are BKM Express, Papara, and Paycell. In addition, some global services such as Google Pay are available in the country. However, there is little data available on the revenues or market shares of these services. Our findings and an explanation of our research strategy are detailed below.


HELPFUL FINDINGS

BKM EXPRESS


PAPARA


PAYCELL
  • Paycell was launched by the cell phone company Turkcell as a wallet in which all banks’ cards can be added and payments made via Turkcell monthly bill.
  • Burnmark reports that 44% of Turkish adults lack access to a bank account. Such services have been launched as an attempt to reach this population
  • The service is now under Turkcell's subsidiary company Turkcell Payment and Electronic Money Services Inc. (TÖHAŞ).
  • The service has 5 million users, according to Turkcell.


INTERNATIONAL COMPANIES
  • In terms of coverage of the global mobile e-wallet services (Apple, Google and Samsung) in Turkey, we were only able to locate this source which is behind a paywall.


RESEARCH STRATEGY

We began our research by looking through industry reports, presentations and tech blogs. Using this method, we were able to identify several well-known e-wallet platforms in Turkey. We defined top as companies that appeared most frequently as the highest-ranked e-wallet providers in Turkey by credible publications and experts in the industry. The name that recurred the most often was BKM Express, the service established by the national bank. This method also helped us identify other providers such as Papara, Google Pay, Mobilexpress, and Paycell. However, we were unable to find revenue figures for these companies or transaction figures that would allow us to calculate the revenues or market share by looking through these kinds of sources.

In order to determine the revenues or market shares of these companies, we next looked through databases such as Crunchbase, Owler, and Hoovers. We also did a direct search for any information on these companies' revenues in order to find any market analyses, press releases, or news articles with this information. Unfortunately, this method of searching did not return any results.

As a final strategy for finding the revenues or market shares of these companies, we searched for financial statements or reports by these companies. To do this, we looked through their official websites, press releases, and other credible publications such as Forbes, Reuters, and Bloomberg for information on their revenue. Unfortunately, this method also did not return any revenue or transaction figures on these companies.

Despite these methods, we were unable to find any source determining the top e-wallet services in Turkey by revenue or market share. This may be because these services are often part of a larger company (for example, Paycell is a service offered by the cellular company Turkcell, and the revenue of the whole company is thus uninformative in relation to the e-wallet offering) or are private companies (as is the case with the smaller start-ups such as Papara). In a couple of cases, we were able to find numbers of users. However, it was not possible to convert this into market share without an overall figure for the number of Turks using e-wallet services.
Part
03
of three
Part
03

EWallet Market In Turkey

In 2017, the market share of e-wallet in the digital transaction space in Turkey was 7%, and in 2018, it was 11%, indicating that the e-wallet market is growing. This document provides a screenshot of the total e-wallet market size in Turkey in 2018.

OVERVIEW OF THE E-WALLET MARKET IN TURKEY

  • Turkey still uses cash in a lot of its financial transactions, even though there are digital options.
  • Turkey ha a plan to transition away from physical cash by 2023.
  • The Turks prefer using cash for micropayments.
  • In 2016, more than 50% of person-to-person payments were made in cash.
  • Cash is a popular method of payment for the unbanked population.
  • E-wallet makes up 2% of the total financial transactions in Turkey.

DIGITAL FINANCIAL TRANSACTIONS

  • As of 2018, the e-wallet market share in the Turkey market was 11% of digital transactions, and in 2017, it was 7%.
  • Digital transactions rank immediately after credit card transactions (74%) and are followed by debit cards (6%).
  • Bank transfers were at 2%.
  • A breakdown of the e-wallet market size and share is also provided in this report, although it is behind a paywall.
  • Turkey has a population of 80.8 million, 58% internet penetration, and 0.99 mobile subscriptions per capita.
  • The e-commerce market is expected to grow by 70% over the next four years.

CONCLUSION

  • The 4% growth from 2017 to 2018 is an indication that the market for e-wallets in Turkey is growing.
  • Furthermore, the penetration of online transactions is a clear indication that this market share, as well as the market size of e-wallet transactions, will continue to grow.

RESEARCH STRATEGY

Your research team began by trying to identify industry reports that would provide the market size, growth, and share of e-wallet in the Turkish economy. The team was able to locate one such report, but details of it were hidden behind a paywall. However, the team included this report in the research brief.

Next, the team searched through media and tech news sites that would address the growth of e-wallet in Turkey. These sources gave the overall growth of Turkey as it is transitioning from cash to a cashless society. The sources provided details of companies in the e-wallet market and ranked them as well.

Afterward, the team searched through research sites that provide statistical information such as Statista, PYMNTS.com, and Research and Markets, and obtained the market share of 2018 and 2017. By comparing both market shares, the team was able to establish a trend for the growth of the e-wallet market in Turkey.

Lastly, your research team searched for any reports or information from government sources such as the finance ministry in Turkey. The team searched for any press releases or public address of the e-wallet market, and the digital financial market as a whole. However, the team was unable to acquire any information about e-wallet and only came across some info on how the invoicing system for e-commerce companies was allowed to be paperless by the Ministry of Finance, in 2015.

Did this report spark your curiosity?

Sources
Sources
From Part 01

Alipay Balloons in Turkish Tourism Market

equalocean.com
Publication Year: 2019
Quotes
  • "However, in a payment method report of Turkey in 2018, it shows that only 11% of Turkish people will choose E-wallet. Credit cards, on the other hand, leads in the payment method with 74%. Will this partnership between Alipay and ininal be limited to Chinese tourists? Or they might have deeper cooperations in Turkey?"

In 2018, Digital and Mobile Payment Systems in Turkey

slideshare.net
Publication Year: 2018
b

Cashless Turkey by 2023: BKM

bkm.com.tr
Publication Year: 2017

Cash Still Has A Long Future In Turkey | PYMNTS.com

pymnts.com
Publication Year: 2018

The rise of digital and mobile wallet: Global usage statistics from 2018

paymentscardsandmobile.com
Publication Year: 2018

MEDICI | Turkey: The Journey to a Cashless Society

gomedici.com
Publication Year: 2019

(PDF) Adoption of mobile payment systems: a study on mobile wallets

researchgate.net
Publication Year: 2016

Global Findex 2017 Report by World Bank

globalfindex.worldbank.org
Publication Year: 2018

Why Turkey Plays a Major Role in the Global Payments Market

blog.wirecard.com
Publication Year: 2019
From Part 02

BKM Express launches checkout-free payment in Turkey

thepaypers.com
Publication Year: 2019
Quotes
  • "more than 1.5 million users who enjoy BKM Express"
  • "BKM Express, a Turkey-based digital wallet"

MEDICI | Turkey: The Journey to a Cashless Society

gomedici.com
Publication Year: 2019
Quotes
  • "TROY’s value proposition has helped it penetrate the market in less than two years and achieve a market share of 21% since the beginning of 2017. "
  • "The second platform is a digital wallet BKM Express, which is supported by 19 banks and has 1.6 million users."
  • "The functionalities of the BKM Express wallet include e-commerce and m-commerce, one-click payments, face-to-face, P2P transactions, and donations."

Turkey; An exceptional Market for Payment Innovations | Bankalararası Kart Merkezi

bkm.com.tr
Quotes
  • "Turkish banks launched the world’s first national digital wallet, BKM Express, as early as 2012"

Digital 2019 Turkey (January 2019) v01

slideshare.net
Publication Year: 2019

10 Fintech Startups in Turkey to Watch Closely - Fintechnews Middle East

fintechnews.ae
Publication Year: 2018
Quotes
  • "Founded in 2015, Papara is an electronic money and payment company. It provides a platform that users can use to load balance from thousands of points, transfer money 24/7, shop safely online, and play games. The company reached 40,000 users in the first three months after its establishment."
c

Papara

crunchbase.com
Quotes
  • "Downloads Last 30 Days 76,919"

Cenap Doğru, Papara’ya transfer oldu

hurriyet.com.tr
Publication Year: 2018
Quotes
  • "Papara, an electronic money company with more than 1.3 million members"
b

Cashless Turkey by 2023

burnmark.com
Publication Year: 2017
Quotes
  • " In BKM express, a crossindustry payments system, mobile has surpassed web transactions in 2016."
  • "The payments segment is clearly the leading space in Turkey with 72 FinTechs belonging to the category. 2015 witnessed a launch of 13 payment FinTechs and 3 digital banking FinTechs. Almost 65% of FinTechs are focusing on providing digital alternatives to cash for consumers. "

Mobile Wallet Profiles 2019: Apple Pay, Google Pay and Samsung Pay - ResearchAndMarkets.com

businesswire.com
Publication Year: 2019
Quotes
  • "In both Russia and Turkey, Google Pay was used more intensively for online purchases than Apple Pay"

Our Subsidiaries

turkcell.com.tr
Publication Year: 2010
Quotes
  • "5 million customers with the Paycell brand"

Kart Saklama ve Tek Tıkla Ödeme | Kart ile Tahsilat

mobilexpress.com.tr
Quotes
  • "Mobilexpress is a payment infrastructure that enables our business partners to benefit from One-Click Payment, Recurring Payment and Payment Gateway services by storing credit cards in PCI DSS Level 1 compliant secure systems . "
From Part 03

Payment Processing Market Share Report | Competitor Analysis | PayPal, Stripe, Braintree

datanyze.com
Publication Year: 2019

Turkey: payment methods 2018 | Statista

statista.com
Publication Year: 2018
d

Statista Screenshots

docs.google.com
Publication Year: 2019

Turkey Mobile Wallet and Payment Market Opportunities Q3 2018 Update (Databook Series) - Market Size and Forecast (2016-2025) by Mobile Commerce, P2P transfer, Bill Payment, Retail Spend, Consumer Attitude & Behaviour, and Market Risk

researchandmarkets.com
Publication Year: 2018

Cash Still Has A Long Future In Turkey | PYMNTS.com

pymnts.com
Publication Year: 2018

Payment Methods in Turkey - Paymentwall

paymentwall.com
Publication Year: 2019
Quotes
  • "Turkey is experiencing rapid growth as Internet and smartphones penetrate the market. Digital commerce is considered a developing industry in Turkey, where only 8 million people own credit cards. Alternative payment methods are popular in the nation; ¾ of its population prefers to pay for digital purchases with mobile phones (direct carrier billing) or with prepaid cash cards."
  • "TURKISH PAYMENT METHODS BY MARKET SHARE 59% CREDIT CARDS 1% PREPAID CARDS 37% MOBILES 1% BANK TRANSFER 2% E-WALLETS"
w

Worldpay | Turkey - benefit from local card processing

worldpay.com
Publication Year: 2018
Quotes
  • "With a huge population of 80.8 million, 58% internet penetration and 0.99 mobile subscriptions per capita, Turkey's eCommerce is expanding and expected to grow significantly by 70% over the next four years. "