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PayPal to shutter operations in Turkey over licensing hurdle

To remain in business there, the online payments service would need to set up local IT systems, which it does not plan to do.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney

PayPal is leaving Turkey.


PayPal is closing up shop in Turkey.

As of June 6, customers there will no longer be able to send and receive money via a PayPal account, the online payments service said on its Turkish website. PayPal users will be able to log into their accounts but only to transfer money to a Turkish bank.

PayPal blamed the closure on a new policy instituted by Turkey's financial regulator BDDK, which prevents the company from obtaining the necessary license. The new policy would have required PayPal to establish a local IT center in the country, something the company does not consider doable given its global approach to maintaining its IT systems.

"We respect Turkey's desire to have information technology infrastructure deployed within its borders, however, 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," a PayPal spokesperson said in a statement sent to CNET.

Tech firms run into challenges doing business in certain nations. Some countries, including Turkey, have strict censorship rules that have led to the takedown of social media sites Twitter and Facebook. Other countries require that companies establish a local presence in order to operate. The companies then face the decision of whether to comply.

"We have no choice but to suspend processing payments as our application for a Turkish payments license has been denied by the local financial regulator, the BDDK," the spokesperson added.

(Via TechCrunch)