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Billing itself as one of Turkey’s largest privately held bank by assets, Garanti has been the most aggressive when it comes to rolling out contactless payment in Turkey’s innovative banking market.

Garanti was the first major bank in Europe to roll out contactless payment, in July 2006, when it began issuing cards carrying MasterCard’s PayPass application.

The transactions did not comply with the EMV payment standard. But Garanti announced in September 2008 it was rolling out multiapplication “Bonus Trink” cards, which do follow the more secure EMV specifications. They also pack the bank’s Bonus loyalty program in contactless mode and can support a separate Mifare-based transit fare payment application. The bank ordered an initial batch of 300,000 cards.

Before that, in 2007, Garanti began issuing contactless stickers with the PayPass application onboard and also put PayPass on a watch.

The bank also extended the reach of its contactless bank cards to direct payment of fares on buses in a handful of small cities or provinces, the first such bank to do so in Europe. And Garanti began issuing contactless cards in Romania in 2008.

Yet, despite being Turkey’s largest merchant acquiring bank, retailer acceptance of contactless cards is still lagging well behind card issuance. But the bank and others hope to increase contactless acceptance significantly by the end of 2011.

Other banks have joined Garanti in issuing cards. This and the contactless loyalty program could encourage more merchants to sign up. So will plans by Garanti to put the contactless feature on prepaid and debit cards. It also planned by the end of 2009 to add a contactless interface of the high-end American Express Centurion cards it will issue.

Garanti has shown interest in NFC, anchoring a small internal NFC payment trial launched by Turkey’s largest mobile operator, Turkcell, in 2008. The project was one of the first Pay-Buy Mobile pilots backed by mobile operator trade group the GSM Association. The bank also plans to participate in a multibank NFC trial organized by interbank group BKM, although that pilot has suffered significant delays.