The purpose of the outline for banking application activity is to create "infant protection" for credit card companies and nonbank entities, further to the reform to increase competition in the banking system (the Shtrum reform), in order to strengthen these entities and support increasing competition in the area of payments and credit to small businesses in the medium term.  The outline also ensures continued innovation in the area of payments, to benefit customers and businesses.


  • In the past three years, Israeli banks have developed innovative payment applications that make it possible to transfer money easily between individuals (P2P – person-to-person), using a mobile phone, without needing to type in the bank account details of the transferee.  Use of these applications has increased rapidly, and customers are evidently satisfied with the innovation and convenience of these applications.
  • The three banks that operate such applications approached the Bank of Israel asking to expand the activity of these applications to include payment to businesses (P2B – person-to-business).  This development is consistent with global trends.
  • After examining the issue and holding discussions with the Ministry of Finance Budget Department, the Competition Authority, the banks, the credit card companies, and other relevant parties in the payments market, and with a broad view of the entire future world of payments and the infrastructure needed to advance the world of payments, it was agreed that the banks would act in the area of payments to businesses in limited form in the coming three years. 
  • The outline balances the need to increase competition in the area of payments and in financial areas in general in the medium and long terms to benefit households and small businesses with continued encouragement of innovation by the banking system in the short term.  As such, the outline creates an "infant protection" for the credit card companies as part of the reform to separate them from the banks, with the aim of making them competitive financial entities, as well as other nonbank entities that wish to operate in the field.
  • If there are material changes in the market, such as the implementation of the EMV standard in payment terminals at merchants, regulating the activity of nonbank entities in the area of payment initiation services, or giving nonbank entities access to Masav including immediate payment services, the necessity of the limitations on banking application activity will be reconsidered.


Bank of Israel Governor Prof. Amir Yaron said, "We see great importance in developing the payments market in Israel, and are working with a broad view in order to make sure that the infrastructure of this market (such as the EMV infrastructure, and fast payments infrastructure for all participants in the field) will be developed and will enable an innovative and competitive market that will have a wide variety of participants, whether domestic or foreign."


Supervisor of Banks Dr. Hedva Ber said, "The payments market is changing rapidly, and will continue to do so in the coming years as more and more payments are made through applications. The number of households and microbusinesses using the various payment applications, with a high level of satisfaction, is increasing.  Limiting the use of applications for payments at businesses in the short term will allow the credit card companies and other competitors in the market, including foreign participants who so wish, to prepare and establish their own applications or digital wallets, to enter the applications field, and to work to increase competition to benefit households and small businesses."