Irit Mendelson, Director of the Accounting, Payment
and Settlement Systems Department, spoke at the conference of the Association
of Israeli Chambers of Commerce, held at the Tel Aviv Stock Exchange. She presented the Bank of Israel’s activity
in the area of payment systems
concerning innovations in means of payment in general and reduction of the use
of paper-based means of payment in particular, against the background of the
Cash Law coming into effect. The Bank’s
public information and implementation work is in cooperation with the Israel
Tax Authority, which is entrusted with enforcement of the Law. Among other things, Ms. Mendelson revealed
the new check format that will be put into circulation during the year.
The Bank of Israel is taking a number of actions to encourage
the use of lower-risk advanced electronic means of payment and the
implementation of the sections of the Cash Law that relate to checks. As such, the Bank has acted to update the
standard for check printing in Israel, such that on checks that are not
initially printed with limited transferability (without the limitation of “to
the beneficiary only” printed on the check), the back of the check will contain
a table providing the payer or receiver of the check with information they will
need to note alongside it.
The law’s restrictions regarding check transactions:
Transactions between private individuals—A person who is not a business shall not receive
checks totaling more than NIS 5,000, for any purpose, if the name of the receiver
of the payment does not appear on the checks.
The prohibition applies to both the writer of the check and the receiver
of the check.
Transactions between businesses—A business cannot give or receive checks of any
amount, for any purpose, if the name of the receiver of the payment does not
appear on the checks. The prohibition
applies to both the writer of the check, whether the writer is a business or
not, and to the receiver of the check.
Transfer of checks—It is prohibited to transfer checks or to receive transferred checks,
if the name and ID number of the transferring party does not appear on the
check.
A post-dated check deposited with the bank for
safe-keeping before January 7, 2019
shall be considered as a check deposited before the law came into effect, and
the restrictions shall not apply to it.
The change in the uniform check standard—in relation
to the back of the check—is intended to provide a response to the limitations
on transferring checks in accordance with the Reducing the Use of Cash Law:
Only one transfer is permitted between private
customers / businesses—for amounts above NIS 10,000, where the transferee and
his ID number must be listed on the back of the check. A check may be transferred more than once if
on the second transfer the check was transferred to a banking corporation, the
Postal Bank, or a license holder for the provision of deposit and credit
services, for the purpose of being paid out.
In recent years, the Bank of Israel has led and
advanced many issues in the payments system, including the field of debit
cards—in order to allow for an alternative to the use of anonymous paper-based
means of payment, the use of which is limited by the Reducing the Use of Cash
Law. The Bank of Israel is acting to
remove barriers and to create the infrastructure that will enable transactions
to be made through debit or deferred debit (use of a combined card) while
granting the customer control over choosing the type of transaction.
As such, we have witnessed a marked increase in the
use of immediate debit cards in recent years—an increase of about 30 percent in
both the number of transactions and the cumulative annual amounts between 2016
and 2017.
Implementation of the EMV standard, a standard that enables smart payments at merchants,
which, in addition to being a secure standard for making transactions through
payment cards, will provide an infrastructure for smart proximity payments.
The Bank of Israel will continue advancing reforms in
the payments system, and is taking further infrastructure measures, the effect
of which will be felt in the coming years.
These include the advancement of contactless payments, where technology
enables payments by holding a payment card / smart phone / smart watch /
electronic bracelet, and so forth against a reader in order to make the
payment. Examples of this exist in the
Android Pay, Samsung Pay, and Apple Pay services.