One of Türkiye’s biggest fintech success stories has come to an abrupt halt, as the Central Bank of the Republic of Türkiye (CBRT) has permanently revoked the operating license of Papara, a local payment and electronic money service provider that once symbolized the rapid rise of fintech innovation in the country.
The Central Bank’s decision to discontinue the operating license of Papara, which has over 23 million users in the country (about one-fourth of the local population), is marking the most dramatic regulatory intervention yet in the country’s fast-growing digital finance sector.
The move follows a sweeping investigation into the firm’s illegal betting and money laundering activities, implicating thousands of user accounts and senior executives.
The decision, announced on October 30, 2025, formally ends Papara’s authorization to issue electronic money and operate as a payment institution. Once celebrated for its sleek prepaid cards, instant money transfers, and ambitions to expand across Europe and Asia, Papara now finds itself under state control after authorities linked over 26,000 accounts to 102 unauthorized betting platforms.
Investigators allege that nearly ₺12 billion ($287 million) circulated through banks and crypto wallets tied to the scheme between 2021 and 2023. The case has quickly become a defining moment for Türkiye’s fintech industry, one that underscores regulators’ determination to tighten AML and KYC enforcement across the board.
In May 2025, Turkish authorities first launched a major probe into Papara, detaining 13 individuals, including founder Ahmet Faruk Karslı, over suspicions of facilitating illegal gambling transactions. The Central Bank soon appointed the Savings Deposit Insurance Fund (TMSF) as trustee and imposed transaction limits on the company while investigations continued. By the fall, regulators had traced extensive links between Papara and unlicensed betting operations, culminating in the CBRT’s October 30 decision to revoke its license outright — a rare and severe penalty in the Turkish fintech landscape.
Papara’s downfall sends a powerful message to the broader ecosystem: compliance can no longer lag behind innovation. The case exposes deep vulnerabilities in how some fintechs handle customer onboarding, transaction monitoring, and reporting obligations. It also illustrates that licensing is not permanent protection; regulatory revocation is now a credible risk even for established brands.
For the industry, this shift could prove double-edged. On one hand, consumer confidence may weaken in the short term, especially among users wary of platform integrity. On the other hand, fintechs that demonstrate robust compliance and transparency could gain a competitive advantage as regulators and investors favor operators with a proven “clean” record.
Papara is not alone in this regulatory crackdown. The CBRT has reportedly suspended or restricted several other electronic money firms, including Sipay, Vepara, and Fzypay, amid similar concerns over transaction flows and regulatory breaches. Papara’s case marks the fourth license revocation connected to illegal betting in 2025. Back in spring, the Turkish regulator suspended all operational licenses of PayFix and two other electronic payment providers, Aypara and Ininal, amid the expanding illegal gambling investigation.
This trend aligns with broader reforms tightening fintech oversight: new licensing mandates for wallet providers and open banking compliance requirements through BKM (Interbank Card Center) by the end of 2025.
The Papara episode highlights a turning point for Türkiye’s financial innovation narrative. After years of rapid growth with light-touch supervision, local fintechs, even those belonging to Türkiye’s leading fintech players, are now entering an era of heightened accountability.
