[Dave Birch] I’ve been in Istanbul working for a customer in the telecommunications field. As always, I’ve really enjoyed it. I love coming to Istanbul because it’s a dynamic place. There’s a lot going on and people are always trying to launch new products and services. Right now, it’s a really great living case study of the co-evolution of banks and telecommunications operators because of the early adoption of contactless payment technology in Turkey.

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Garanti Bank began issuing PayPass cards last year. They issued the U.S. version of PayPass rather than the non-U.S. (ie, EMV) version because they wanted to get it off the ground quickly, I imagine. This means that all the transactions have to be online, which has (I would have thought) limited its uptake in some applications. Nonetheless, they’ve already issued 40,000 cards and have already signed up 1,600 merchants (primarily in and around Istanbul). I was looking for one of the terminals so that I could try it out using my new U.K.-issued Visa contactless card and post an encouraging message about standards and interoperability, but I couldn’t find one.


I did, as an aside, conduct just such an interoperability test at RBS HQ the other day: I am pleased to report that my Barclays Visa OnePulse worked flawlessly in the RBS terminals. More interestingly, so did a phone that I’d loaded a payment card into as well: I didn’t say anything to the guy serving me at the Starbucks, I just waved the phone over the terminal. The terminal beeped and the guy immediately said “That’s really smart. Where can I get one?”.

Anyway, Garanti then moved on to issue a few thousand self-adhesive stickers, a quarter the size of regular PayPass cards, that customers can stick on their phones and then they can make contactless payments using their handsets but without having to wait for the NFC phones that we’re always going on about. Now, I know from our experience with a sticker-payment pilot here in the U.K. that you have to choose the stickers very carefully. In particular, you need stickers that have electromagnetic shielding so that the phone doesn’t stop them from working. Garanti found (as we have, and so have others) that with the right stickers it all works rather well and (despite the fact that the sticker antenna is much smaller than a regular card antenna) there’s no need to change the POS terminals.

Why did they do this? Well, Mehmet Seazgin, the head of payment systems at Garanti Bank sets the tactic in context:

Since we came up with this sticker idea, which works with all operators and brands of handsets, that gave us a whole new negotiation power with the network operators.

The negotiation that he is referring to is about NFC. In essence, Garanti didn’t want to cave into the mobile operators and put the application on the SIM. But in the end they knew that they would have to cave, so they wanted the best hand possible before they sat down with the operators. Stickers gave it to them.

Now they are going to take part in an NFC pilot with mobile operator Turkcell under the auspices of the GSM Association’s “Pay-Buy Mobile” initiative announced last February. Since the GSMA represents hundreds of operators worldwide, the architecture that they are developing — which is SIM-based — is something that banks will have to learn to live with.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

1 comment

  1. Easiest place to try your card in Istanbul is at the Burger King in Ataturk airport!
    I agree with your sentiment that this is a living case study – in fact there isn’t much that they don’t do in Turkey. Contactless, NFC, CAP, EMV Instant Issuance – it’s all there and working. Even their EMV rollout was quicker and more successful than the UK one.
    [Dave Birch] Thanks Ainsley, I promise I’ll try the Burger King next time.

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