The
Bank of Israel today granted an acquirer license to TRANZILA Ltd. TRANZILA is
expected to begin operating within several months as the fourth acquirer in
Israel’s payment card market, and will compete against the existing companies.
The license was issued following consultation with the Licenses Committee and the
receipt of its full consent to issuing the license.

 

Supervisor
of Banks Dr. Hedva Ber said, “We have declared our intention to enhance competition
in the merchant acquiring market, and already in November 2015 we markedly
eased the barriers to entry in the market—we established a simple and
supportive process for receiving a license, we sharply lowered the capital
requirements for a new acquirer, and more. As a consequence of these steps,
after many years in which only three companies operated in the market, a new
player is joining the merchant acquiring market today. The granting of a
license to TRANZILA reflects a major step in promoting the goal of increasing
the competition in the means of payment sector and in the credit market, for
the benefit of small and medium businesses and households. We assess that the
entrance of a fourth company to the market will create an alternative for
companies and will lead to increased competition, which will be reflected in the
lowering of acquiring fees paid by merchants, improved service, a higher level
of innovation, and later on, in accordance with the business plan submitted by
the company, to enhanced competition in issuing payment cards. I urge merchants
to actively compare the various price offers, to negotiate, and to switch
between acquirers, in order to reduce the costs of acquiring.”

 

In
2016, the merchant acquiring market in Israel was approximately NIS 270 billion,
and consisted of the three credit card companies—Isracard, Cal (Cartisey Ashrai
L’Yisrael-Israel Credit Cards), and Leumi Card. Recently, the Banking
Supervision Department took numerous actions to remove barriers to entry, and
to make the entrance of new competitors possible. These actions made possible a
rapid process for granting an acquirer license to a new company, so that within
approximately three months from the receipt of the complete application from
the company, the Bank of Israel approved the granting of the license. The
removal of the barriers included:

·    Making the licensing process shorter and more efficient, by providing regulatory certainty with
regard to granting a license before a significant investment (primarily in the
areas of technology and workforce recruitment) was made, easing both the
connection to the local payment card system (Shva) and  the receiving of the licenses from international
credit card schemes;

·      Notable leniency in minimum capital requirements (starting capital of only NIS 1 million is
required of a new acquirer)

·      Notable regulatory leniencies for entities that don’t have a significant impact on the stability of
the financial system and the payment system. The leniencies were granted in the
areas of corporate governance, risk management, and other regulations.

The
Banking Supervision Department works closely alongside the companies that are
interested in receiving a license, and helped TRANZILA throughout the entire process,
until the license was granted. Beyond helping the company, this enabled the
Banking Supervision Department to precisely formulate the leniencies required
by a company to begin operations.​

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