Another stage in implementation of the reform to increase competition:

The Governor of the Bank of Israel granted Mastercard Inc. a permit to hold 10 percent of the shares of Shva


Bank of Israel Governor Prof. Amir Yaron has granted Mastercard  Inc. a permit to hold 10 percent of the shares of Shva–Israel Credit (Debit) Card Switch Company, after it signed a conditional agreement to purchase the shares from Bank Hapoalim.  This permit comes in addition to the permit issued for the purchase of 10 percent of Shva shares from Bank Leumi by Visa Worldwide at the end of 2018.


In addition, Bank Hapoalim, Bank Leumi, and Israel Discount Bank are preparing for a public offering that will lead to a further dilution of the banks' holdings of the company's ownership.  The Bank of Israel is guiding the change in ownership in order to ensure that it is done in such a way that maintains the stability of the system and supports the advancement of competition.  Among other things, the Bank of Israel has required that internal directors be appointed to the company through the General Meeting, following the expected offering, in order to allow the new owners to influence the composition of the Board of Directors.


In accordance with the Increasing Competition and Reducing Concentration in the Banking Market Law, 5777–2017, the banks must reduce their holdings in Shva, so that such holdings do not exceed 10 percent per individual bank.  Following the banks' sale of the 20 percent of the company's shares to Visa and Mastercard, the offering is expected to lead to the required further reduction in the banks' holdings, such that at the end of the process (and no later than January 2021), each bank shall hold no more than 10 percent of the company, while the rest of the company will be held by nonbank entities.  The Law also sets out that the company will be able to provide services to nonbank entities as well, such as new debit card issuers or acquirers and new participants from the world of payments.


Supervisor of Banks Dr. Hedva Ber said, "The payment market is undergoing, and is expected to undergo, great changes in the coming years.  The entry of two international companies that specialize in payments as owners of Shva—the credit card switch in the State of Israel—is a significant expression of international trust in the Israeli payments market, and will allow them to bring their know-how and innovation to the market.  In the coming years, due to the separation of the credit card companies from the large banks, the change in ownership of Shva, and the advancement of implementation of the EMV payments standard, households and businesses are expected to benefit form a more innovative, more advanced, more competitive, and more diverse payments market."