As mentioned earlier this week, whilst in Turkey I visited with BKM, the interbank clearing system for low value payments.
Owned by the largest 10 banks in Turkey, BKM opened for business in 1990 and now processes half of the transactions in the country.
The other half are run on a 'as on-us' basis on the same bank card or same bank POS or ATM (there are 49 banks in Turkey, with 28 on the BKM system).
After a very successful completion of national migration to the Chip & PIN EMV platform in 2007, each and every bank made their own rollout of contactless through an industry-wide coordination shortly afterwards.
However, for all the individual efforts of the banks, there has been little success of the contactless services. The number of terminals in use represents just 4% of the total POS in the country and the number of transactions are minimal.
This has been disappointing, as were the efforts to integrate payments and mobile.
For example, BKM has actively worked with all of the Turkish mobile operators (Turk Cell, Vodafone and Avea) to try to integrate payments chips with mobile SIM and MicroSD, but this has also not taken off and efforts have been abandoned.
So, what next?
Interestingly, what's next is to create a national digital wallet system: BKM Express.
BKM Express began trials in summer 2012 with just 5 banks and 9 merchants.
After a proof of concept trial period, it was offered to a wider audience and reached 15 banks, 100 merchants and 150,000 consumers by summer 2013.
A year later and it has 650 merchants and over 300,000 registered accounts, of which almost half are actively using the wallet on a regular basis.
As I've seen so many digital wallets, why is this one working?
Because it's onboarding merchants at a pace? Yes.
Because the banks back it as a national wallet system, rather than each producing their own? Yes.
Because it's simple and easy, aggregating all cards from all banks in one simple interface? Yes.
It's pretty cool.
Once you have the wallet, you can make person-to-person payments; checkout with BKM Express; search transactions across multiple credit and debit cards; and even see what's hot around your area!
It doesn't do Personal Financial Management (PFM) as BKM wanted to leave that to the banks to differentiate their offers.
Similarly, it appears a little bit clunky right now, e.g. it doesn't offer in-app payments so you have to leave whereever you are on the mobile in order to sign-in to BKM Express to make a payment.
But these are early days, and the key thing that BKM wanted to stress to me is that they are only young in this game.
It's just a two year old system.
So, it will be interesting to see how many ACHs start to enter the wallet wars versus leaving it to the mobile firms, banks and payment processors.
Speaking of which, Turkey just changed their regulations to allow non-bank payment processors to enter the market.
Interesting times for all.
If you're interested in more about BKM Express and BKM, here are their slides providing an overview of the firm's activities: