PayPal is shutting down in Turkey (PYPL)

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Beginning June 6, PayPal will cease operations in Turkey because of the firm’s inability to get a new license from BDDK, a major Turkish financial regulator, according to TechCrunch.

PayPal couldn’t obtain the license because of a new Turkish policy that requires IT systems to be housed within the country — a policy that PayPal, which has data centers across the globe, does not follow, according to Tech Crunch.

The shutdown will reportedly impact “tens of thousands” of businesses and “hundreds of thousands” of customers, who will be able to withdraw funds from their PayPal account and transfer them to a Turkish bank account. PayPal hopes to eventually obtain permits to begin operating again, according to Finextra.

It’s worth noting that Turkey recently launched its own card payment system, called Troy, that will be used by all 29 major banks in the country as part of a push to move to a cashless society, encourage issuers to serve the unbanked market, and make processing cheaper.

The absence of major alternative payment products like PayPal that don't meet regulatory criteria could encourage citizens in the country to seek out more traditional ways of making payments. If other countries tighten regulations related to IT requirements, global expansion and cross-border processing could become more challenging and costly for digital payment firms. 

PayPal's move here is evidence of the constantly shifting world of payments, as a handful of factors could create major changes in one or multiple nations. And that's just one piece of the puzzle.

Evan Bakker and John Heggestuen, analysts at BI Intelligence, Business Insider's premium research service, have compiled a detailed report on the payments ecosystem that drills into the industry to explain how a broad range of transactions are processed, including prepaid and store cards, as well as revealing which types of companies are in the best and worst position to capitalize on the latest industry trends.

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• 2016 will be a watershed year for the payments industry. Payments companies are improving security, expanding their mobile offerings, and building commerce capabilities that will give consumers a more compelling reason to make purchases using digital devices.
• Payments is an extremely complex industry. To understand the next big digital opportunity lies, it's critical to understand how the traditional credit- and debit-processing chain works and what roles acquirers, processors, issuing banks, card networks, independent sales organizations, gateways, and software and hardware providers play.
• Alternative technologies could disrupt the processing ecosystem. Devices ranging from refrigerators to smartwatches now feature payment capabilities, which will spur changes in consumer payment behaviors. Likewise, blockchain technology, the protocol that underlies Bitcoin, could one day change how consumer card payments are verified.

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• Analyzes the alternative technologies, including blockchain, which could further disrupt the ecosystem.

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