The US and Turkey are no strangers, but it can still be hard to send money to Turkey from the US. Diplomatic relations between the two countries started all the way back in 1831 when Turkey was still the Ottoman Empire. They were renewed in 1927 after the Turkish Republic was founded. In 1947, the two countries signed The Economic and Technical Cooperation Agreement. Today, Turkey is an important US ally as one of the oldest members of NATO.
But yet it remains quite a challenge to send money to Turkey. Veem was launched to help U.S. small overcome the huge hurdles they face when it comes to international B2B payments. Here are a few key things we thought you might find helpful when it comes to trading with, and sending money to Turkey.
US Trade with Turkey Tops $8 Billion USD
In 2015, the Turkish economy was ranked the 28th largest economy in the world, shipping over 153 billion US dollars worth of products. In 2016, the number dropped to 142 billion. While there was a slight decrease in overall exports, a subtle increase was registered for exports to the US. In 2014, Turkey exported $7.4 billion worth of goods in 2015, 7.8. A year later, it crossed the $8 billion dollar threshold.
Early numbers show that the growth in Turkish imports trend will continue in 2017. However, if we look at the size of the Turkish economy, the values are still unimpressive. The US is only their fifth largest export partner, behind Germany, the UK, Iraq, and Italy. The difficulty of transferring money to Turkey from the US may be considered an inhibitor to better trade relations.
It’s safe to say that Turkey’s economy is EU-centric as more than 54% of exports makes its way to Europe, 28% to Asia, 8% Africa, and only 5.5% to North America. Among Turkish export categories, Turkey registered 105% growth when it comes to trading precious metals and gems from 2009 until 2016. Plastics came in a distant second with a growth of 62.5%
Turkey’s top exports in 2016 were:
- Vehicles worth 19.8 billion US dollars
- Machinery and components worth $12.4 billion
- Precious metals and gems worth $12.2 billion
- Clothing (Knitted) and accessories worth $8.9 billion
- Electrical machinery and equipment worth $7.8 billion
Turkish Banking Customers Give Low Ratings
Since the Turkish economy seems to be EU-centric, it’s only natural for their policies and regulations not to stray far from those of the EU. When it comes to statistics on efficacy, Turkey is often in the same boat as Eastern European countries—many of which are not part of the European Union.
Owners of small businesses in the US should be aware that, even when paired with many non-EU countries, Turkey sags in customer satisfaction statistics. In a 2016 survey, 36 percent of the Turkish respondents reported delays in payments from foreign customers—compared to 18 percent in Eastern Europe—and they blamed the banking system.
Foreign B2B customers are required to settle their invoices in 39 days, 4 days longer than the Eastern European average. In 2017, 43.9 percent of the Turkish respondents expressed their disappointment with the Turkish banking system and stated that the banks are to blame for payment delays.
Turkey’s Fluctuating Lira
Recent political unrest has led to a 40 percent decrease in foreign investments and a 30 percent drop in earnings from the tourism sector. The depreciation of the Turkish lira soon followed, but the Central Bank has managed to take the right measures and bring the lira back on course after six months. Still, when sending money to Turkey, it’s wise to take fluctuations into account.
Turkey Has Quite a Few Regulating Bodies
- The Banking Regulation and Supervision Agency (BRSA) that tries to optimise the workings of the credit system and stands as a safeguard for the Turkish banking system and economy.
- The Capital Markets Board of Turkey (CMB) which regulates and supervises Turkey’s institutions and securities markets while also protecting investors.
- The Energy Market Regulatory Authority (EMRA) which tries to ensure a competitive environment in the energy market while striving for stability and transparency.
- The Information and Communication Technologies Authority (BTK) which regulates and supervises the telecommunication market.
The Best Way to Send Money to Turkey
There are two ways to send money to Turkey. One of them is the traditional way, via bank wires. However, Turkey’s banking system is far from perfect. It causes delays, and the fees can add up to a hefty sum. While the Central Bank and the BRSA actively manage the situation, Turkey’s economic evolution is hard to predict. Corruption, lack of transparency, and unrest can lead to more fluctuations.
For small businesses that perform frequent low-value transactions, sending money to Turkey via traditional bank transfers can be so cumbersome as to become crippling.
Veem international payments help you to avoid all that. We’ll streamline the transaction processes, make the experience more user-friendly, save you on bank-to-bank headaches – and fees.
Here are several resources regarding Turkish Imports to the US: