Turkiye’s Trade Ministry Introduces Secure Payment System to Combat Fraud and Reduce Informality in Second-Hand Vehicle Transactions
In a bid to curb fraud and enhance transparency in the automotive sector, Turkiye’s Trade Ministry has introduced a new regulation mandating the use of a Secure Payment System in all second-hand vehicle transactions. This system, designed to synchronize the transfer of payment and vehicle ownership, is set to become compulsory for all citizens starting from September 27.
Combatting Fraud and Reducing Informality
The “Motor Vehicles Trade Regulation,” recently published in the Official Gazette, aims to bring about significant changes in how vehicle sales are conducted in Turkiye. Previously, the Secure Payment System was only mandatory for businesses involved in second-hand motor vehicle trade, such as car dealerships. With the new regulation, this requirement is extended to individual citizens, ensuring that every transaction is both secure and transparent.
- Secure Payment System: The system, introduced by the Turkish Notaries Association on February 3, 2020, facilitates the simultaneous transfer of the vehicle sale price and ownership.
- New Regulation: Now, any payment made in cash, wire transfer, or EFT must be processed through authorized banks, electronic money institutions, or payment service providers acting as intermediaries.
How the System Works
When selling a vehicle, the process begins with a visit to a notary. Here, the vehicle is checked for any issues that could prevent the sale. If the vehicle is cleared for sale, the notary will verify whether the Secure Payment System has been used. If the payment has been successfully transferred, the funds are blocked in the buyer’s account, and the sale proceeds. The vehicle registration and payment transfer occur simultaneously.
- Payment Verification: If the payment cannot be verified, the transaction is halted until the funds are confirmed.
- Risk Mitigation: This system significantly reduces the risks of fraud, forgery, and theft, ensuring that both the buyer and seller have peace of mind during the transaction.
Advantages for Buyers and Sellers
The Secure Payment System offers a modern, secure, and efficient transaction process, providing numerous benefits:
- Increased Security: The system eliminates common risks associated with cash transactions, such as counterfeit money or non-payment after the transfer.
- Efficiency: Transactions are streamlined, saving time and reducing the need for extensive paperwork.
- Cost-Effective: By automating the payment process, the system reduces the potential costs associated with errors or fraud.
Moreover, the system’s digital infrastructure supports better record-keeping, providing reliable data to public authorities and helping to reduce informal practices in the automotive market.
Reducing Informality in the Turkish Automotive Market
One of the key goals of this new regulation is to reduce informality in the vehicle sales market. By mandating the use of the Secure Payment System, the Trade Ministry aims to ensure that all transactions are properly documented and traceable.
- Compliance and Record-Keeping: The system’s mandatory use helps ensure that every transaction is recorded, providing transparency and accountability in the market.
- Economic Impact: By reducing informal transactions, the regulation is expected to contribute positively to Turkiye’s economy, curbing tax evasion and supporting fair market practices.
A Safer Future for Vehicle Sales in Turkiye
With the Secure Payment System set to become a requirement for all second-hand vehicle sales, Turkiye is taking a significant step towards modernizing its automotive sector. This regulation not only protects citizens from fraud but also promotes a safer, more secure market for vehicle transactions.
As the September 27 implementation date approaches, both buyers and sellers should familiarize themselves with the new system to ensure a smooth and secure transaction process.
Source: AA / Prepared by Irem Yildiz