To full paper (in Hebrew)
The Bank of Israel sets the terms of access for the “Payment Card Services” and “Automated Bank Devices” systems operated by Shva (Automated Banking Services), and the “Credits, Debits, and Payment Transfers” system operated by Masav (Automated Clearing House).
The Bank of Israel is taking an additional significant step toward opening the payment systems to new entities and promoting competition in Israel’s payments system. The Bank is publishing today the terms of access to the controlled payment systems—the threshold conditions for participation in the systems. The terms of access are objective, risk-based and transparent to the public, and allow open and fair access to participation in the payments system.
Currently, payment systems in Israel only allow direct participation, and setting the terms of access is a significant step to adding indirect participants. This step will enable nonbank participants to participate in payment systems directly or indirectly.
The current operative step is the latest in a series of steps taken by the Bank of Israel to remove barriers in the payments system in Israel. These steps are in line with the recommendations of the Committee to Increase Competition in Common Banking and Financial Services (the Strum Committee).
Director of the Accounting, Payment and Settlement Systems Department Irit Mendelson said, “The Bank of Israel is working through various channels to enable new players to participate in the payment systems, and is dealing with barriers—legal, regulatory, and operational—that prevent new participants from operating in the payment systems. Publishing the terms of access to the controlled systems is as an additional significant pillar in the measures that will enable additional entities to operate in the system.”
The terms of access
- Distinguish between types of participants in core activities of the payment systems and enable an entity, in given conditions[1], to choose direct or indirect participation.
- Clarify that it is a direct participant’s obligation to provide indirect access to the system’s services in a fair and nondiscriminatory manner.
- Establish that in addition to meeting the terms of access to the payment system, an entity must also meet its connection requirements in order to participate in it.[2]
The terms of access to the systems create the framework through which new entities can connect to them and to operate through them. This framework enables entities to act in the payment system as indirect participants—that is, through reliance on services provided by direct participants in the system, and without needing to meeting the requirements that direct participants are required to meet (the system rules). The terms of indirect participation will enable new participants to provide payment services[3] to their customers, and those new participants will increase the competition in payment systems in Israel.
[1] Terms that are objective, transparent, and risk-based—for example, the scope and share of the turnover of the system. When they are out of line, only one type of participation will be allowed.
[2] Payment system connection requirements include the series of technological, operational, and business requirements to participate in the system, and are set by the operator. These requirements are an integral part of the various systems’ rules.
[3] Managing payment accounts, executing payment transactions, issuing means of payment, and acquiring payment transactions.