PayPal has been forced to cease operations in Turkey. The shutdown will go into effect on June 6. Turkey recently denied PayPal of a new license, which is required to operate within the country. According to TechCrunch, the reason for the denial was that PayPal does not localize all of their IT infrastructure inside of Turkey.

To get a clearer picture of what's going on in Turkey, Bitcoin Magazine reached out to Emre Kenci, CTO and co-founder of BTCTrader, which owns and operates Turkish Bitcoin exchange BTCTurk.

Will Other Online Payment Providers Leave Turkey?

According to Kenci, PayPal's reasons for leaving Turkey may also apply to other payment providers. Then again, others are able to earn exemptions. "Businesses like Western Union have been exempt from the law," said Kenci.

"If the business is holding funds on behalf of the consumer, for the purpose of allowing the consumers to transfer money to other consumers or businesses, then the business needs an electronic money license," explained Kenci. "If the business does not hold any consumer funds but allows businesses to accept payments, then they need a payment processor license. Electronic money license holders are allowed to operate as payment processors. So the latter license is a subset of the former. Each business is evaluated by the regulator on a case-by-case basis."

Kenci also noted the regulation goes far beyond the reported requirement to keep all IT infrastructure within the country's borders. "Everything from the organization chart to the CV of the CEO, from the paid capital of the business to how funds are held in bank accounts, [and] financial and security audits are within the scope of the regulation. And there are specific rules for each," he explained.

Kenci added that all of these requirements create a barrier to entry for small businesses who wish to experiment with new, innovative ideas.

In terms of Kenci's own business, he holds the view that the activities of BTCTurk do not fall within the scope of this law. "The regulation's scope is holding and allowing the transfer of funds in currencies recognized by the central bank of Turkey," he explained. "The regulator has deemed that bitcoin is out of this scope."

Can Bitcoin Help for International Transfers?

Although there has been a large amount of hype around the use of Bitcoin for international money transfers and remittances, real data on this sort of use case is not yet widely available. According to Kenci, SWIFT is the most popular method of sending money abroad, especially for amounts larger than $1,000.