The Shift in Turkey’s Payment Landscape: Embracing the National System
Turkey is experiencing a significant shift in its payment systems landscape, as citizens increasingly opt for the national Troy payment system over international giants MasterCard and Visa. This movement represents a broader campaign to boycott products and services from countries providing financial support to actions they oppose.
The Rise of Troy Payment System
The national Troy payment system has gained traction among Turkish consumers who wish to support their economy and show resistance to certain international policies. With a population of approximately 85.8 million, the number of Troy cards in Turkey escalated to 19 million as of October 2023. The system also saw a transaction volume surge to 47.9 billion Turkish liras (about USD 1.68 million). This shift is not only a stand against international payment systems but also a strategic move to ensure that transaction commissions stay within the domestic economy, boosting local financial sustainability.
Commission Savings and National Benefits
Local media report that through Visa and MasterCard, 4% of each purchase ends up abroad. Igdır University highlighted that these global systems rake in commissions between USD 2,000 and 3,000 million from Turkey, without contributing back in taxes, due to their non-resident status. Should these companies be taxed locally, Igdır University estimates they would owe approximately 8,000 to 10,000 million Turkish liras (between USD 28 and 35 million).
Simple Switch to Troy for Citizens
A key factor in the success of Troy is the ease at which consumers can join the system. The Turkish Interbank Card Center developed an incredibly simple process, where a customer need only contact their bank’s support service to request their card be included in the Troy network. The system, which covers all ATMs and point-of-sale terminals in Turkey, has expanded since its 2017 inauguration. It currently includes collaborations with 48 banks and electronic money institutions.
Global Trends Away from Western Payment Systems
Turkey’s move to Troy parallels a global trend where countries are stepping away from Western payment mechanisms to establish their national systems. The unreliability of Visa and MasterCard was spotlighted after Russian banks were disconnected from these systems following international sanctions. Russia responded by launching its Mir payment system in 2014, which, as of June 2023, is accepted in 17 countries, including Cuba and Venezuela. Moreover, countries like Indonesia are also pursuing their own national payment systems to fend off potential external pressures.
A Step Towards De-dollarization
Perry Warjiyo, the general director of the National Bank of Indonesia, suggests that these moves also symbolize a step towards de-dollarization, signaling a shift to use various currencies in international trade. This aligns with regional trends, especially within the ASEAN bloc, which is leaning towards decreasing dependency on Western currencies.
The information for this article has been sourced from Sputnik World, confirming a growing global narrative that reflects an increasing desire for financial autonomy and economic empowerment. This trend showcases a significant change in the financial landscapes of emerging markets, with potential implications for international trade and economic policies.
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