Here’s Why PayPal Is About to Suspend Operations in Turkey
PayPal (PYPL) will suspend its Turkish operations within the next week after the country’s financial regulators rejected its license applications—apparently because it does not keep its IT systems in Turkey.
The move will affect businesses in the country that accept PayPal payments as well as Turkish customers wanting to pay businesses in Turkey and elsewhere.
In a notice to customers, the payments outfit warned they would no longer be able send or receive money starting June 6.
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PayPal provided instructions for transferring outstanding balances to regular bank accounts, adding it would continue trying to get the necessary permissions to resume its Turkish operations.
“Customers will still be able to log in to their PayPal accounts and withdraw any balance on their accounts to a Turkish bank account,” a PayPal spokesperson said in a statement emailed to Fortune. “Supporting our customers is very important to PayPal. However, we have no choice but to suspend processing payments in Turkey as our application for a Turkish payments license has been denied by the local financial regulator and we have been instructed to suspend our Turkish business operations.”
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A PayPal spokesperson was also quoted by TechCrunch, saying that the Turkish Banking Regulation and Supervision Agency had refused to license PayPal because it wants payment services’ IT systems to be located in Turkey.
“PayPal utilizes a global payments platform that operates across more than 200 markets, rather than maintaining local payments platforms with dedicated technology infrastructure in any single country,” the spokesperson told TechCrunch.