B2B Payments

Global Spotlight: Turkey

Experts note that Turkey holds a unique position in Europe, both geographically and socially. The nation has one of Europe’s largest young populations, providing a large potential not only for innovation, but for adoption of new technologies. Plus, while Turkey is a member of the EU, it sits as a neighbor to Asia, Africa and the Middle East, providing a vast mix of economic, political and social influences.

It is perhaps appropriate, then, that a nation on the cusp of geographical lines would also be on the cusp of various developments in the B2B sector. The nation’s B2B startup population is growing, declared to be the “next big thing” at the recent Startup Turkey event. Some experts argue that banks are insufficiently lending to SMEs. Coupled with the enduring problem of late payments, Turkey’s market could be prime for alternative lenders to enter and fill the SME lending gap. Similarly, while B2B eCommerce has not yet taken off in Turkey, the rise in B2C online shopping suggests that B2B’s digital migration isn’t far behind. And lastly, while Big Data hasn’t quite taken off in the country, startups and existing Big Data storage infrastructure suggest that the demand for data analytics and insight will soon be met. The climate appears ripe for Turkey to innovate and evolve in all of these areas.

B2B Startups

Every year, Turkey is home to the Startup Turkey event to showcase the nation’s newest and most innovative startups. This year, the event zeroed-in on B2B startups, considered the “next big thing” among attendees.

Among those attendees were payment giants MasterCard and PayPal, who offered insight into how Turkey’s startups will begin to experiment within B2B. Startup Turkey pointed to two domestic young companies in particular, GaniPara and SambaPOS, which have forged new paths for startups to solve other companies’ biggest payments problems.

SME Finance

Policymakers and experts debate the state of Turkey’s small business financing today. Some, like Türk Eximbank CEO Hayrettin Kaplan argues that Turkey is a model for federal support of its SMEs. Turkey holds the G-20 presidency for this year, and according to Kaplan, SME finance is one of its highest priorities while in this position. “As a Turkish banking system, we developed a very good financial infrastructure which supports SMEs,” he said in an interview last month with The Worldfolio.

But others, like economist Süleyman Yaşar, argue that Turkey has failed to accelerate its economic growth because it is not doing enough to support its SMEs. “SMEs in Turkey generate 76 percent of the employment and make 54 percent of all investments in the Turkish economy; but they receive merely 25 percent of the bank loans,” he said in an interview published Saturday by Today’s Zaman.

Separate research released in mid-May by Atradius revealed that in eastern Europe especially, late payments continue to pose a significant financial threat to SMEs. While experts like Yaşar may hint at a financing gap for SMEs, and while late payments produce a need for SMEs to access working capital, financial services innovation and alternative lending have not yet taken hold in Turkey. The EU’s progress report on the nation, published last October, concluded that the only developments in FinServ were among the nation’s big banks.

B2B eCommerce

In an interview with PYMNTS earlier this year, PayPal’s Regional Director for Turkey, The Middle East and North Africa, Kivanc Onan, said that the nation is in a unique position in terms of building up its eCommerce market. In the last four years or so, Onan said, the nation has seen significant growth in both eCommerce and cross-border trade, especially since PayPal’s own arrival just four years ago.

Despite this growth, analysts say that Turkey has experienced slower-than-expected adoption of eCommerce, especially among SMEs. A recent TÜSİAD report on the subject found that a combination of factors has led to this hesitation, including a lack of trust in eCommerce, labor, financial resources, technical infrastructure, and others. IDC Corporate figures, however, found that in the last four years, Turkey’s B2B eCommerce sector grew by 28 percent, suggesting that there is some traction among B2B companies to migrate their operations online.

Big Data

Turkey’s businesses have only just begun to step into the realm of Big Data. While experts say the nation has also been slow to implement cloud computing infrastructure, companies do have somewhat of a starting point in adopting Big Data analytics tools. According to reports, the nation has strict regulations for detailed reporting, a move that requires businesses to establish sophisticated data storage facilities. Analysts predict that as a result, companies are likely to adopt data analytics and increase their demand for data applications in the near future.

Turkish firm Etiya is one young company that has pioneered the Big Data movement in the nation. The firm offers a Somemto social media management tool, which integrates Big Data analytics into social media. Just years ago Etiya partnered with Oracle to strengthen its Big Data services, which take advantage of Facebook and Twitter’s high usage rate. Another local startup, Hazelcast, has emerged as a new player in Big Data by offering database memory technology solutions for an array of industries that generate data in large volumes.

Enterprise resource planning (ERP) is expected to see a growth rate of nearly 10 percent between 2015 and 2019 in Turkey due to the nation’s developing cloud and data analytics infrastructure. A new study from Technavio, released Saturday (May 30), found that Turkish software developers have paid particular attention to ERP solutions tailor-made for the smartphone, which researchers found to be gaining traction among companies in the banking and retail industries.


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