Israel has a new payment card issuer. After five months of negotiations, the Israel Postal Company has been accepted as a non-full member in Visa Europe, and has been authorized by Visa Europe to issue Visa cards. The Israel Postal Company has thus become the first non-bank entity in Israel to issue Visa cards.
Minister of Communications Moshe Kahlon said, "The issue of Visa cards by the Postal Bank will reduce costs for consumers, and will continue the trend of expanding the financial services offered by the Israel Postal Company."
The permit from Visa covers all kinds of payment cards. However, the Postal Bank will initially issue debit cards only, and will not undertake any credit risk. This is because the Bank Supervision Department at the Bank of Israel will not see a problem in the Postal Bank, which it does not supervise, expanding its activity in this way.
At the same time, Visa Europe has opened a representative office in Israel.
The issuer permit for the postal Bank represents a blow to Visa-ICC (Israel Credit Cards Ltd.), which is liable to lose tens of thousands of customers. The Postal Bank currently issues two types of card: debit cards, and pre-paid cards, through Visa-ICC, which is owned by Israel Discount Bank (TASE: DSCT) and First International Bank of Israel (TASE: FTIN1;FTIN5).
Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2010
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