Israel Postal Company Ltd. plans to launch Visa debit cards in the first quarter of 2011, pursuant to an issuers license from Visa Europe.
The Post Office will only issue cards; it will not clear them, and clearing will be handled by one of Israel's three credit card companies: Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa), Isracard Ltd., or Leumi Card Ltd.. The Post Office will publish a tender next month for choosing the clearing company.
Although Visa Europe awarded an issuer license for all type of credit cards, the Postal Bank will initially only issue debit cards, which means that the Postal Office will bear no credit risk. The Post Office's target audience for the debit cards will be 400,000 Postal Bank customers with checking accounts. These accounts' deposits total about NIS 1 billion, or an average of NIS 2,500 per account.
A debit card automatically deducts purchases or cash withdrawals by the card from the customer's bank account. These cards have several advantages for the poor: a low card debt, immediate payment, and giving cardholders better control of spending.
Published by Globes [online], Israel business news - www.globes-online.com - on July 19, 2010
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