Can "Payment Service Providers" act as an "Interface Provider" within the scope of banking-as-a-service?

What Is Banking-as-a-Service?

According to the Regulation on the Operating Principles of Digital Banks and Banking-as-a-Service

Banking-as-a-service refers to the service model whereby, through the interface offered by "interface providers", customers connect directly to the systems of "service banks" via "open banking services" and are thereby able to carry out banking transactions through the service bank.

Who Is an Interface Provider?

An interface provider refers to an enterprise established in the form of a capital company that, through its mobile application or its internet-browser-based interface, enables its customers to carry out banking transactions by accessing the banking services offered by the service bank via the bank's open banking services.

The Field of Activity of the Interface Provider

1. There is no restriction concerning the interface provider's principal field of activity.
2. On this matter, the only restriction is that "banks" cannot be interface providers. For this reason, it is not possible for a bank to be an interface provider.
3. However, there is no obstacle in the Regulation to payment service providers other than banks (under Law No. 6493, payment service providers are banks, electronic money institutions, payment institutions and the Post and Telegraph Organization Joint Stock Company) being interface providers.

Indeed, paragraphs 6 and 10 of Article 13 of the Regulation contain expressions that may be taken to mean that "payment service providers" too may be interface providers:

• (6) Provided that the interface provider does not accept deposits or participation funds on behalf of the service bank and, except where the interface provider is a payment service provider, provided that deposits or participation funds are in no way deposited into the service bank through the interface provider, this support service shall not be deemed to constitute the acceptance of deposits or participation funds, nor a marketing activity directed at the acceptance of deposits or participation funds, within the meaning of the relevant subparagraph of the first paragraph of Article 4 of the Regulation on Support Services.
• (10) The service bank is obliged to provide information via its website on the scope of the services it renders, in a manner showing the list of all interface providers to which it provides services and which banking services it makes available to them, and to send to the Agency in writing, within one week following the date of signature, a copy of every service agreement it signs with interface providers and of every amendment to an agreement that envisages a change in the scope of the services it will provide to the interface provider. In order for the service bank to be able to sign a service agreement with an interface provider, the relevant interface provider must have been authorized as a support service institution by the Board pursuant to the sixth paragraph. The ability of an interface provider to work with more than one service bank is subject to the authorization of the Board upon the application it will make pursuant to the sixth paragraph.

The Position of Payment Service Providers

1. As can be seen, the Regulation in essence clearly states that payment service providers too may be interface providers.
2. Since it is expressly stated in another article that banks cannot be interface providers, it follows from the Regulation as a whole that it is possible for electronic money institutions, payment institutions and the PTT to be interface providers.
3. Nevertheless, within the scope of the authority granted by Articles 14/5 and 20/6 of Law No. 6493, Article 15 of the Regulation on Payment Services and Electronic Money Issuance and on Payment Service Providers stipulates that payment institutions and electronic money institutions shall operate solely with respect to the payment services stated in their operating applications and approved by the Bank, and that, apart from this, they may not engage in any commercial activity other than those enumerated in the article.
4. Since this article does not include any express activity relating to banking-as-a-service, it is our view that, unless the legislation is amended, it is not possible for these institutions to be interface providers.

Conclusion

Although, under the regulation issued by the BDDK (Banking Regulation and Supervision Agency), it is possible for payment service providers other than banks (electronic money and payment institutions, as well as the PTT) to be interface providers, because this activity is not regulated in the regulation issued by the TCMB (Central Bank of the Republic of Türkiye) and because these institutions are prohibited from engaging in activities other than those specified in the regulation, it is not possible today for electronic money and payment institutions to be interface providers.