The
Bank of Israel is today publishing a public consultation document, in order to
receive information from the public regarding the infrastructure for immediate
payment.
The
public consultation is the first stage in a process of setting up an advanced,
efficient and reliable infrastructure in the payment system in Israel, which
will be added to the existing payment and settlement systems and will serve for
clearing immediate retail payments, like similar infrastructures existing in
various countries worldwide.
Immediate
payment is a new means of payment, in which the payment initiator is charged
the sum of the payment immediately, and the payment receiver is credited with
the amount immediately. This allows the payment receiver to make immediate use
of the amount that is credited to the account, similar to payment with cash,
and different than most of the common means of payment, in which the credit is
not immediate.
The
use of immediate means of payment provides a response to many needs existing in
the Israeli payments market, as it allows the execution and receipt of
immediate payments in a convenient and efficient manner, including payments
at small amounts between private individuals or between private individuals and
merchants, at full 24/7 availability and at very low transaction costs; the reduction
of the shadow economy in Israel by decreasing the use of paper-based means
of payment; increasing the liquidity and reducing the costs of credit to
businesses, creating a platform for clearing existing and future advanced means
of payment, including through various applications; enhancing the
competition in the payment system by the entrance of new players who offer
immediate payments throughout the transaction execution chain; and increasing
the resiliency in Israel’s payment system by promoting an additional switch
for transactions that will be carried out through advanced means of payment
(that are not based on payment cards).
Ms.
Irit Mendelson, Director of the Accounting, Payment and Settlement Systems, said “The Bank of Israel continues to act to promote innovation
and efficiency in the payment system in Israel. Establishing an infrastructure
for clearing immediate payments will provide a response to many needs existing
in the Israeli payments market and will enable Israeli citizens to use means of
payment that are advanced, faster, and convenient, similar to what is customary
in other advanced economies. The Public Consultation document that we are
publishing today is the first stage in the process of examining the
establishment of such an infrastructure.”