Following on with our regular weekly interview, the Finanser talks this week with Soner Canko, CEO or BKM (Bankalararası Kart Merkezi), the ACH for Turkey.
BKM was established in 1990 as a partnership of public and private banks. Today, all the banks that issue a card and own a POS are members of BKM. The ACH is notable for being a key promoter of contactless payments and, more recently, launching its own mobile payments wallet for the banks to leverage to their clientele.
How do banks and BKM interplay?
Among BKM's main fields of activity are to develop procedures to be applied among banks for credit/debit cards, to perform operations for ensuring standardization, to establish domestic rules, to carry out interbank authorization, clearing and settlement transactions, to establish relations with foreign entities and, if necessary, to represent its members with these entities and to carry out transactions that are already being made by any bank in a more secure, faster and cost-effective manner from a single centre.
BKM works synergistically with its member banks. Therefore I believe that Turkish Card Payment Systems Market is very lucky, because the needs as well as the actions that must be taken to improve the industry are discussed and determined by the committees, which meet regularly and in which the representatives of banks take a place, and also by one-to-one discussions. This is a great opportunity that many other countries do not have.
We experienced the benefits of this opportunity in the project for migration to Chip&PIN. All banks have decided their migration dates, acted together, and harmonized all credit cards, POS devices and ATMs in compatible with EMV in a very short period under the leadership of BKM and we achieved a highly successful migration, which is considered as a model throughout the world.
What motivated BKM to promote contactless in Turkey?
Turkey met with contactless cards in 2006. Turkish cardholders have always been the first to meet with many new contactless products until today. Today, as of the end of 2014, 23 percent of all credit cards and 4 percent of all terminals have contactless features. We can argue that these figures are very low for a country that has met with contactless cards very early.
But I believe that transition to the new generation of payment systems will be much more difficult until the users get used to contactless cards. Users must get used to the speed and practicability of contactless in order to have an easier adaptation to new generation of payment systems.
On the other hand having contactless terminals widespread is very important to have the infrastructure of technologies, such as NFC and HCE.
Therefore we pay significant efforts to popularize contactless terminals and ensure that users experience it.
What does BKM see its mobile wallet now and in the future?
BKM Express is a digital wallet, developed in 2012 together with the banks in order to increase the volume of e-commerce. We did a lot in the last 2 years in this process. We initially worked hard to expand the acceptance network and today BKM Express is one of the payment methods accepted by e-commerce companies, which produce more than 50 percent of e-commerce transaction volume. 99% of the cards in Turkey can be included to the system thanks to our online integration with 17 banks.
We also added P2P money transfer functionality to BKM Express in 2013. Users of BKM Express can immediately send money to a mobile phone number 7×24 thanks to our database.
We also began to allow our users to use BKM Express for face-to-face payments in 2014. Our users have begun to use their digital wallets in more areas like fuel stations and restaurants.
We are well aware that time and practicality are very important for users in today's digitalized world. Therefore we believe that payments must be invisible and complementary for shopping experiences of users. For this purpose, we search and try what we can do to improve our user's experiences everyday and make our developments accordingly. We aim to make BKM Express a digital wallet that can be used by its users everywhere and everytime.
How will payments change in Turkey over the next ten years?
As BKM, our main objective is to have a society that makes payments without cash in 2023. We have already started our works both to develop the infrastructure and increase the awareness of society for this purpose. For instance, we began to explain the benefits of transition to digital payments with our Goodbye Cash campaign in 2010.
Turkish banking system has a strong infrastructure, which will certainly help us in transition to digital society. On the other hand, banks are competing with each other with their innovative products. All kinds of products and services that will meet the needs of end users are offered.
Today, approximately 40 percent of payments are made with cards in our country. 10 years later, we will have a country, in which all of the payments are made in digital environment.
What are the key things that you focus upon?
The position of our payment systems is very strong. Users meet with many payment system products for the first time in our country throughout the world thanks to valuable managers in the industry and their innovative perspectives.
We, as BKM, pay a lot of attention to adopt quickly to changes, follow up the new technologies and developments throughout the world and experience all innovations as much as possible since we are operating in a field, in which the expectations and competition are very intense.
Being a member of many different platforms to exchange knowledge is one of those very important issues for us. This allows us not only to monitor different markets but also to establish strong relationships.
How are you innovating?
We believe in internal entrepreneurship. As a part of this belief, we expect from all our employees to make contributions to the innovation. While trying to reinforce this strategy with the trainings we receive, we are also paying a lot of attention to open communication in our job. We support all our employees as much as possible to clearly communicate their ideas and recommendations and implement them regardless of their current jobs.
For this purpose, we established a R&D center, named BKMLab, within our company. We are testing new technologies and proactively completing our preparations before launching them.
Thanks to BKMLab, we can test and observe new products and services before they are introduced to the market and, if they are found suitable, we can continue on our works or, end them. For example, we have completed our first project in this center for integration of BKM Express and GoogleGlass. After getting the results of this project and integrating new wearable technologies, we intend to achieve the most suitable solution.
BKMLab will also soon be open for other entrepreneurs in our ecosystem. Start-ups will have an opportunity to benefit from the center at any time of the day.
Will ApplePay and PayPal Here, for example, make BKM more or less relevant?
One of the main duties of BKM is to grow the ecosystem of payment systems. For this purpose, all innovations throughout the world are monitored closely and analyzed. BKM prepares common platforms for the most suitable and fastest penetration of products, which assist in the growth, development and/or improvement of payment systems, to Turkish market and sometimes it assumes new roles in adaptation to new technologies.
Therefore BKM is very open for new products and services throughout the world as well as for collaboration with them and provides the utmost support for development of the ecosystem.
Any innovation in payment systems is introduced quickly to Turkish market thanks to BKM's organization that closely monitors new technologies and adopts swiftly to changes, which is also valid for all local or international players!
About Soner Canko
Dr. Soner Canko graduated from Istanbul University, Faculty of Political Science, Public Administration Department. He also received master¹s degree and Ph.D from Istanbul University, Faculty of Economics.
Dr. Soner Canko¹s career has commenced in 1990, where he performed in sales, management and consulting roles at Procter & Gamble, Citibank, Hewlett Packard. He was the founder and Country Manager of First Data Turkey, and lastly Assistant General Manager of Ziraat Bank. Today, Dr. Canko is the CEO of BKM (Bankalararası Kart Merkezi).