As global connectivity continues to expand, the ecommerce sector has emerged as a promising platform for both local and foreign businesses. Payment systems are central to every online commerce transaction, playing a significant role in shaping the experience of consumers and businesses. Gaining insights into consumer payment preferences and habits is crucial for the sustained growth of various markets, particularly in the realm of cross-border transactions.
Türkiye, characterised by its rapid digital evolution, a large and youthful demographic, and forward-looking governmental initiatives, is a compelling and promising ecommerce environment. A blend of distinct elements – such as a significant inclination towards digital payments, a complex regulatory landscape, and susceptibility to currency fluctuations – requires an in-depth analysis of Türkiye’s payment infrastructure.
For global online businesses looking to establish a foothold in this market, it’s vital to understand the practical aspects and conditions prevailing in the region. The preference for card-based payments and the obligation to adhere to intricate regulations concerning local procurement processing are both influenced by currency instability. Adjusting to local payment methods, including digital wallets and instalment payment alternatives, is fundamental to fully capitalising on the potential of Türkiye’s ecommerce sector.
Türkiye’s substantial youth demographic, which constitutes 46% of the country’s total population, is the main reason why ecommerce is thriving. With an average age of 32, this cohort holds significant buying power and digital competencies that are crucial in shaping market dynamics and customer behaviours.
By promoting technology and digital literacy, Türkiye’s education system has been pivotal in nurturing a digital-friendly culture. Coupled with the widespread use of social media and easy access to high-speed internet, online shopping has become a favoured and convenient option among the younger population.
This digitally adept demographic presents a profitable prospect for foreign ecommerce firms aiming to tap into this rapidly expanding market. The fusion of Türkiye’s swift digital transformation and its tech-inclined population forms the foundation for a dynamic ecommerce environment.
Türkiye’s ecommerce market is significantly influenced by its diverse payment landscape. More to this point, card payments are preferred by Turkish consumers, making up 64% of online transactions, which equates to approximately USD 7.42 billion in yearly sales.
The Turkish payment sector offers a variety of options, ranging from debit and credit cards to digital wallets and instalment payment methods. The Troy card, backed by 13 Turkish banks and the government, is widely used, with credit card transactions reaching 79 million, and debit card transactions hitting 139 million in 2020.
Although global online businesses may initially face hurdles due to local processing requirements, aligning with local payment trends can help tap into the immense potential of the Turkish ecommerce sector. Moreover, the active engagement of Turkish consumers in loyalty schemes and their familiarity with instalment payments underscores their financial acumen, presenting opportunities for enhanced customer loyalty and increased transaction values.
The volatile nature of the Turkish Lira (TRY) poses challenges for businesses entering the market. Nevertheless, despite this obstacle, Türkiye’s ecommerce market has seen remarkable growth, hitting over TRY 800 billion in 2022, marking a 110% increase from the previous year. This rapid market expansion, coupled with the rising volatility of the Lira, emphasises the need for effective risk mitigation strategies for businesses venturing into this market.
A viable strategy is the implementation of multi-currency pricing, which enables businesses to offer their products in multiple currencies, including local and more stable international currencies like the USD or EUR. This strategy offers customers the option to transact in a trusted currency, ensuring a steady stream of international revenue for businesses. This approach is especially important for cross-border payments, facilitating smoother transactions and improved customer experience.
Another potential strategy is forging alliances with local firms to minimise exposure to currency volatility. Such collaborations can allow local partners to manage the sales and distribution in local currency, enabling the international partner to concentrate on transactions in their home currency.
Businesses must also adapt to the unique behaviours and preferences of Turkish consumers, particularly regarding payment methods. Strategies such as multi-currency pricing and partnering with local entities can help manage the fluctuating TRY effectively, ensuring a steady income flow.
Recently, Worldline made a strategic move into the Turkish market by partnering with Lidio Payment Services, a Turkish payment service provider (PSP). This alliance capitalises on local expertise to navigate complex markets, enhance stability, and build confidence in managing currency fluctuations. Consequently, global customers can enter this market through their existing integration, bypassing the need for extensive efforts.
Türkiye holds vast potential for global online businesses ready to understand local nuances and capitalise on the opportunities it offers, especially concerning cross-border payments. However, success in this market requires more than just an understanding of its economic landscape. It demands a deep dive into cultural insights, consumer behaviour, and regulatory standards. Companies that can seamlessly integrate these elements into their business strategies, while effectively managing the challenges posed by currency volatility, are likely to establish a strong foothold in the burgeoning Turkish ecommerce scene.
This editorial piece was first published in The Paypers' Cross-Border Payments and Ecommerce Report 2023–2024, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally.
Guillaume is VP of Growth at Worldline, expanding the company’s unique selling proposition through geographical expansion, alternative payment methods, and M&A. He has 20 years of experience in various positions, holds an MBA from ESCP Business School, and two master’s degrees in Computer Science Engineering from Paris and Oxford.
Worldline helps businesses of all shapes and sizes to accelerate their growth journey – quickly, simply, and securely. With advanced payments technology, local expertise, and solutions customised for hundreds of markets and industries, Worldline powers the growth of over one million businesses around the world. Worldline generated EUR 4.4 billion in revenue in 2022.
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