Digital transformation is making its way around the globe at the pace of individual markets. Some pose greater challenges than others while also representing massive opportunities.
Türkiye is such a market. Straddling the east and west, it’s a nation of 85 million consumers, half of whom are under 30 years old, where smartphone penetration is in the range of 80%. Yet nearly 90% of all transactions are still conducted in cash, despite an assortment of local digital payment methods.
With so many young people owning smartphones, Türkiye is primed for a digital goods and services moment. The caveat: It still requires digital connections to pay for those services.
Saying the opportunity for digital goods and services sales in Türkiye “can’t be overstated,” Worldline Head of Digital Goods and Services Michael Bilotta told PYMNTS’ Karen Webster that Türkiye is among the world’s next major market opportunities for digital.
Pointing to Worldline’s strategy of focusing on emerging markets in recent years, Bilotta said it’s the young Turk with a smartphone and equipped with digital payment capability that will drive a new wave of uptake there.
“The consumers are guiding the market to a large extent,” Bilotta said. “What you see is that because it’s a young population, they’re becoming more and more sophisticated. They’re the ones that are starting to guide this. It’s our responsibility as the payment service provider to listen to what they’re saying, and then build the on-ramps.”
And Worldline has been listening, as evidenced by the news in January that it partnered with Turkish FinTech Lidio to enable more digital commerce in the region. These partners will build on pathways already present to create more digital on-ramps for consumers.
“One of the interesting things about Türkiye is closed-loop loyalty programs,” Bilotta said. “In Türkiye, there’s a huge prevalence. These different loyalty programs, based on the supermarket that they shop at, the coffee shops, and all these things, there are these digital wallets that are centered around these loyalty programs. Those are all local.”
As Worldline has done in markets from Latin America to Asia-Pacific, it is leveraging local payment methods that will enable it to get operational faster and bring more of the digital subscription services beloved in developed markets to Türkiye’s waiting consumers.
Bilotta said he sees the prevalence of closed-loop loyalty programs in Türkiye today as the tip-off that tremendous new demand exists, just waiting for ignition via digital means.
“The digital goods and services that they are looking to take advantage of inherently have a subscription component to them,” he said. “That’s the biggest piece of functionality that we needed to ensure was relevant and was present in our solution. The thing about recurring is that it should be something that’s frictionless, and it should be something that’s invisible.”
It also requires reputational foundations, which is why Worldline’s strategy in emerging markets centers on localization. For Turkish consumers to take these preferred local payment methods and buy digital goods and services, from games to streaming and more, it requires payment service providers (PSPs) like Worldline to create the connections consumers trust, in partnership with local payment methods.
“Within a subscription environment, there’s a lot of legwork that goes into that new user acquisition,” Bilotta said, adding that on the consumer-facing side, this must be invisible and seamless at monetization where payment methods make or break transactions.
Describing integrations that happen on the back end to create simplicity and delight for consumers, he said Worldline will identify a country like Türkiye “where we see an outsized opportunity in comparison to what our competition is doing and the pipeline of companies that we see are going to enter that country, and then we identify the right partners for us.”
It circles back to the work Worldline is doing with Lidio.
“They have helped us with the ability to connect with all of the right acquiring and issuing banks, so we have the right connections, so we are able to process payments from the wallets of all of these young consumers that are interested in different subscription services and that are increasing the GDP of their country, Türkiye, through these different methodologies,” he said.
See also: Why Worldline Says Turkey Is Ready for eCommerce Innovation
As Worldline brings Türkiye into its portfolio, particularly for digital goods and services, they’re watching as major subscription services enter the country and seizing on those moments.
“When big names like Spotify, for example, the largest music streamer in the world, makes a splash in Türkiye, that helps to increase the sophistication of the consumer,” he said, adding that it triggers “a domino effect” and a little bit of FOMO (fear of missing out) from others. That’s how the cascade starts, where others pile in, and Worldline is putting the application programming interfaces (APIs) in place to support that.
“The story in Türkiye is about the core functionalities of what resonates with consumers in digital goods and services,” he said. “That is part and parcel of what we need to do globally from a digital goods and services standpoint, which is to increasingly make payments more efficient, more relevant and more invisible to the consumer.”
As Worldline does the legwork with partners like Lidio, Bilotta said he also sees an opportunity to try new digital goods and services strategies that would be harder to introduce in places like Europe and the U.S. that have 20 years of experience with online shopping and streaming entertainment.
Where does all this leave Türkiye’s digital transformation a year from now? With a digital wallet adoption curve akin to some of the world’s most developed markets, Bilotta said.
“I believe that it’s the place that large enterprise-level eCommerce companies, specifically within the digital goods and services space, need to be,” he said. “And they need to be there in a localized way.”
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