Hungary: A Strategic Gateway to the EU
For Turkish fintechs, Hungary is more than just another European market. As Kutay Yalınkılınç, President of the Turkish Fintech Association pointed out, Hungary offers a friendly business environment, relatively fast licensing processes, and EU passporting opportunities. This means a Turkish fintech licensed in Hungary could legally offer services across the EU.
Hungary’s role as a gateway between Western Europe and the Eastern regions makes it an ideal base for fintech companies looking to expand in either direction. In fact, many Turkish companies have already taken steps toward entering Hungary, participating in Budapest Fintech Week and signing cooperation agreements with Hungarian institutions.
Turkey’s Fintech Ecosystem: Strong, Complex, and Full of Opportunity
Turkey’s fintech ecosystem is robust and maturing rapidly. With a population of 86 million (50% of which is under 45) and 95% smartphone penetration, the digital infrastructure is fertile ground for innovation. However, 30% of the population remains unbanked, highlighting a significant opportunity for digital financial services.
The country has four main financial regulators and eight different types of financial licenses. These range from traditional and digital banking to open banking and crypto asset service providers. Licensing, however, is no walk in the park: it takes up to three years to secure certain authorizations. Still, the sector is thriving, as there are:
- 773 registered fintech companies,
- 44 million consumers in the banking ecosystem,
- 134 million credit cards and 213 million debit cards in circulation,
- $170 billion annual crypto transaction volume, ranking Turkey 4th globally.
A Culture of Investment – Just Not in Banks
Due to years of economic instability and soaring inflation (50% this year alone), Turkish consumers tend to avoid saving money in bank accounts. Instead, they invest. Gold remains a cultural and financial favorite: whether gifted at weddings or bought online and delivered to your door. Real estate, U.S. dollars, and even crypto are also popular investment options.
This risk-loving, investment-oriented mindset means Turkish consumers are open to new fintech solutions – especially the ones that help them grow or protect their wealth.
The Remittance Bottleneck: A Billion-Dollar Problem
One of the most pressing challenges (and opportunities) in Turkey’s financial landscape is the cost of remittances. Millions of Turkish citizens working in Western Europe send money home, but commissions range from 5% to 7%. This high cost leads many to use informal channels, such as physically carrying cash during visits home.
If a fintech player—Hungarian, Turkish, or a partnership—can offer a secure and low-cost remittance solution, it could be a game-changer. Hungary’s neutral political positioning and EU integration make it a strong candidate to become a regulatory hub for such services.
The Turkish Post Office: An Underrated Financial Network
One surprising insight from the forum was the financial role of the Turkish Post Office (PTT). Acting as quasi-bank branches, PTT locations in every village enable money transfers, bill payments, and even some banking services. This infrastructure can be a critical channel for fintech distribution, especially in rural or underbanked regions.
Entering the Market: Partnership Over Paperwork
Entering the Turkish market is complex. Licensing takes time, and regulations are strict. That’s why Turkish and Hungarian experts agree: partnerships are the fastest route. Hungarian fintechs are encouraged to find local Turkish partners – either regulated institutions or technology providers. Through these collaborations, they can sidestep lengthy licensing processes and focus on delivering value.
Conversely, Turkish fintechs see Hungary as a launchpad into Europe. And they are ready. The Turkish Fintech Association has over 700 members and is eager to match Hungarian companies with suitable counterparts.
A Milestone Moment for Turkish-Hungarian Fintech Collaboration
As part of this growing fintech alliance, a significant milestone was reached yesterday. Zoltán Ács, Chairman of the Hungarian Fintech Association, announced the formal signing of a cooperation agreement with the Türkiye Fintech Association. The event took place at the residence of Ambassador Gülşen Karanis Ekşioğlu in Budapest, with the presence of Kutay Yalınkılınç, President of the Turkish association.
This partnership marks the institutionalization of a relationship that has flourished over the past year—beginning with a successful fintech meetup in Istanbul and now maturing into regular visits by Turkish fintech founders, investors, and market scouts to Hungary. What makes this collaboration truly special is its organic growth, born from business needs rather than political directives. Türkiye brings a vast, youthful, and largely unbanked digital population to the table, while Hungary serves as a pragmatic gateway to the European market. Together, they form a natural corridor for innovation, scale, and cross-border fintech success.
(Source: fintech.hu)
(Cover photos: Depositphotos)
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