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Representation requirement

In order to remove another entry barrier to new participants in the payment field, the Bank of Israel has instructed MASAV and SHVA and the participants in the systems they operate to amend the system rules, and to thereby allow the participation of nonbank payment service providers, such as fintech and bigtech firms, in the payment systems.  This instruction will help additional participants operate in the payment systems, increase competition in the payments field, and encourage innovation in means of payment.


This instruction sets out the representation requirement that must be implemented by settlement participants (who manage a settlement account in the ZAHAV system and settle their activities through that account), separately in each of the controlled retail payment systems.


A settlement participant (hereinafter – the representative participant) shall not unreasonably refuse to represent a payment service provider in settlement, provided that the payment service provider meets the terms of access to the payment systems.


The representative participant is required to prepare for representation within a reasonable amount of time, which shall not exceed three months from the date of response to the representation request.


If the representative participant refuses the request, the payment service provider is permitted to contact the Payment Systems Oversight Unit if it believes that the refusal was unreasonable.  If the Payment Systems Oversight Unit finds that the representative participant did unreasonably refuse the request, the representative participant will be given the opportunity to make its case and to reconsider its response.  If the Payment Systems Oversight Unit believes that the refusal is unreasonable, this may constitute a breach of the system rules and a contravention of the representation requirement.

This page was last updated on: 04/01/2024