As the digital wallet application becomes widespread all over the world, it offers both a global payment instrument and a secure shopping environment for consumers.

The Regulation on Payment Services, Issuance of Electronic Money and Payment Service Providers was amended to regulate the definition of digital wallets and the conditions for providing digital wallet services on October 7, 2023.

Prior to the amendment, in practice, for organizations with a significant shopping volume, the digital wallet implementation has been required to be carried out through payment service providers.

Both the definition of digital wallet service has been included in the Legislation and the conditions for organizations providing digital wallet services have been determined with the legistlative amendment.

What is the Digital Wallet?

A digital wallet is an electronic device that stores the information relating to the payment account or payment instrument defined by the Customer; it is a payment instrument offered as an online service or application and enables the Customer to make payment transactions using the information relating to the payment account or payment instrument defined by the Customer.

Who can offer digital wallet services under the Regulation?

•    Payment service providers and authorized to operate within the scope of “issuance or acceptance of payment instruments”
•    Authorized to “issue electronic money” in the event that the digital wallet is used as a means of payment at the workplace and the funds related to such payment transactions are transferred through the institution providing digital wallet service 
•    Authorized to “initiate a payment order” if the digital wallet uses a payment account with another payment service provider or a payment account with another payment service provider identified to the digital wallet

What are the services that can not be considered as Digital Wallets?

In the presence of the following conditions, the Legislation regulates that the service provided will not be considered as a digital wallet service:

•    Retention of customer data by the workplace or payment service provider within the limits permitted by the legislation,
•    No direct involvement in any legal transaction with the customer,
•    Where the payment transaction in any way does not create the impression on the part of the customer that it is carried out through the custodian legal entity,
•    The custodian is not the owner of the fund subject to the payment transaction,
•    The rights and obligations regarding the activities carried out can be clearly determined by agreement.

Amendments to the Regulation on digital wallets have been expected for a long time. With the amendment to the Regulation, digital wallets and the conditions for providing digital wallets have been regulated and the Regulation has been harmonized with the practice.