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ISA to Supervise Credit Card Companies, Grant Licenses to Foreign Providers

The Israel Securities Authority (ISA) will now oversee credit card companies and grant licenses to foreign payment service providers, according to a new law passed by the Israeli government. The Regulation of Payment Services Law aims to promote competition in the market while preventing excessive regulation.

New Provisions

  • Foreign payment service providers can operate in Israel without obtaining a full license, subject to individual exemptions granted by the ISA.
  • Licensees can offer additional services, such as ATM services and currency conversion, without needing an additional license.
  • Credit incidental to a payment transaction is allowed, subject to certain criteria, including that the credit be extended for a short period of time and that the interest rate not exceed 24% per annum.
  • The ISA will have the power to grant licenses to foreign payment service providers.

Transitional Provisions

  • Companies engaging in payment services prior to the inception date can continue their activity if they file a license application within three months of the inception date and receive acknowledgement from the ISA.
  • Companies holding an acquirer license or a license to provide credit or financial asset services can continue their activity until 18 months after the inception date, provided they issue notice and file an application for a payment service license.

Benefits

The law aims to promote competition in the payment services market, increase consumer choice, and improve the overall efficiency of the system. By granting licenses to foreign providers and allowing companies to offer additional services, the law is expected to benefit consumers and businesses alike.

Expert Insights

“Barnea Jaffa Lande’s Regulation Department is well-equipped to help businesses navigate the new regulatory landscape,” said Adv. Anat Even-Chen, partner and leader of the firm’s Regulation team. “We are committed to providing expert guidance and support to ensure a smooth transition for our clients.”

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