On July
18, 2016, the Bank of Israel published[1] a
document on “Principles and Complementary Steps in the Development and Use of a
Protocol for Payment Card Transactions”, with the aim of creating conditions in
the payment card market that would enable the entry of new players along the
entire transaction chain.  In the months
following the publication of the Principles Document, the Bank of Israel acted
to advance and implement those principles with the cooperation of the relevant
interested parties in the market, within the Payment Card Committee in which
representatives of the various players in the payment card market are members.


notice is an update to the public regarding the results of the operative
measures taken thus far in implementing the protocol principles.  The Bank of Israel will continue advancing
the implementation of the principles set out, will monitor the developments in
the payment card market, and will examine the need to take additional steps.


of the Bank of Israel’s Accounting, Payment and Settlement Systems Department
Irit Mendelson said, “The measures taken thus far have removed barriers to
the development of competition in the payment card market, and lay the
groundwork for the development of the payment card market in the future. We
have implemented these measures while providing maximum flexibility to all
players in choosing the services they would like to receive and provide.  I call on all parties that are interested in
operating in the payment card market in Israel to study the changes as part of their
considerations of entering into this market.”


following are the measures taken thus far:


–  Accessibility of the

–    The information in the protocol, the publication of which will not put
the payment system at risk, is accessible and available to the general public
through the website of the Shva company[2], which
operates the “payment card services” system.

–    Any interested party can have full access to all the information in the
protocol, subject to signing the confidentiality agreement that appears on the
Shva website.

–      The protocol was translated into English, and is available under the
same conditions as the Hebrew version, in order to also allow parties abroad to
examine the potential of participating in the Israeli payment card market.



–  Modularity of the

–     Following discussions by the Payment Card Committee, the Bank of Israel
formulated a document on “Required and Optional Components of the Protocol”​
, which outlines the protocol implementation policy in the payment card
market.  These components will enable the
various players to choose and implement the protocol partially, according to
their needs.

–      The required and optional components were defined while determining the
minimum required components allowing the maximum flexibility and adoption of
international standards or adjustment to them.


–  Use of the protocol

–     A procedure dealing with how to handle development requests and defining
the minimum service level by the protocol operator was published on the website
of the Shva company[3].

–    In the first stage, a fee for use of the protocol will not be
collected.  At a late stage, the model
will be examined in accordance with developments in the market.


The payment card market in Israel is
currently characterized by the fact that each business must purchase and
implement the entire service and functionality package supported by the payment
card protocol in Israel.


The mentioned above processes are a
significant step in opening the payment card market to competition, since their
implementation will enable businesses, particularly small businesses that have
not so far honored payment cards, to begin accepting payment cards in line with
their needs.  For instance, businesses
can purchase an acquiring services package that does not include acquiring
services for foreign exchange transactions, at a lower price than the acquiring
package that does include foreign exchange transactions. This process will affect
all cardholders in Israel, in that it will enable them to use payment cards at
a much broader array of businesses.



[1] http://www.boi.org.il/en/NewsAndPublications/PressReleases/Pages/18-07-2016.aspx

[2] http://www.shva.co.il/specification-emv/

[3] http://www.shva.co.il/specification-emv/