Anti-Money Laundering News and Information

The Bank of Israel approves the Payment App BIT, turning into a digital wallet

ISRAEL: Bank Hapoalim’s payment platform will issue a credit card jointly with ICC, which will constitute a kind of non-banking club for all of BIT’s customers – most of whom are not the bank’s customers. The frameworks on BIT’s credit card will be subject to the Israeli law Shtrum Act.

The Bank of Israel is giving the green light to Bank Hapoalim, and the BIT payments app can become a digital wallet for all of the banks’ customers. Bit will issue a credit card jointly with ICC, which will in fact be a kind of non-banking club for all of Bit’s customers, most of whom are not Bank Hapoalim customers.

At the same time, it was determined that the credit facilities that Bank Hapoalim will provide to BITcustomers will be counted in its limit on the scope of the credit facility that the bank is allowed to provide. It will be recalled that under the Shtrum Act, it was stipulated that the two large banks must reduce their credit facilities to their customers by 50% for a period of three years. At the same time, it will be possible to grant credit in the framework of NIS 5,000, without this being considered a deviation from the scope of the frameworks.

The Bank of Israel today published a document in which it set demarcation limits for the activities of digital wallets, including BIT. For example, it has been determined that information collected under a digital wallet will not be used to provide financial services or the sale of other financial products, until this issue is examined in all its aspects. It was also stipulated that the wallet will have the option of multiple credit cards within a short period of time, so that customers can choose which credit card to pay through the digital wallet.

“The Bank of Israel closely monitors all developments in the payments market in Israel in general and in the payment wallet market in particular. We will continue to work to ensure that the balance is maintained that allows opportunities for various players to develop the market as innovative, advanced, efficient and competitive” Said the Governor of the Bank of Israel, Prof. Amir Yaron, who handled BIT’sapproval process to become a digital wallet.

About two weeks ago, it was reported in Calcalist that the Competition Authority gave the green light to the move: The Competition Authority examined the cooperation between Bank Hapoalim and ICC, and found that this is not a case that requires its prior approval, and now the last restriction has been removed.

BIT is currently the largest payment app in Israel with more than 2 million users, and it is estimated that it has an 80% market share in money transfers through people through the app. However, the bank subsidizes this activity to an estimated amount of over NIS 100 million a year, since it has almost no income.

Bank Hapoalim now wants to take BIT to the next stage, which will also generate revenue for it, which is the option of paying with BIT App at businesses. The world of payments is in Israel at the beginning of a “big bang”. The dramatic change in the market has been caused by the introduction of an advanced technological standard in business payment terminals (EMV), and this means that payment can be made in businesses with advanced means of payment such as the mobile phone. At this point the duty is to apply it to the big chains, and this coming July the duty will apply to the rest of the business as well.

.

By Irit Avishar (Hebrew), February 14, 2021, pyblished on Calcalist.

Share on linkedin
Share on facebook
Share on twitter
Share on whatsapp
Share on email
Recent Posts