The Banking Supervision Department announces another stage in implementing the EMV standard in Israel—the standard that will improve security and advance innovation in payments


Supervisor of Banks Dr. Hedva Ber: “The full adoption of the EMV standard in Israel will make it possible to advance innovation in the area of payments, increase competition, and reduce the risk of counterfeiting and misuse of credit cards.  We call on all businesses to prepare for the new standard—small businesses will be given longer preparation time than large businesses.  Adapting payment terminals to the new standard will allow the merchant to enjoy advanced payment services and ensure it against fraud.”


FAQ on the EMV payment card standard​

The Banking Supervision Department is continuing to advance the implementation of the advanced EMV standard in the payment card settlement market.  Adoption of the standard will contribute to:

  • Advancing innovation in the area of payments, including making contactless payments via mobile phones;
  • Strengthening competition in the areas of issuance and settlement by removing a barrier to the entry of new players from Israel and abroad;
  • Reducing the risk of counterfeiting and misuse of payment cards by upgrading the security mechanisms, including keying in a PIN code when paying.


In recent years, the Banking Supervision Department has published guidelines regarding the adoption of the EMV standard for entities dealing with the issuance and settlement of payment cards (Proper Conduct of Banking Business Directives 470 and 472).  Accordingly, most of the cards issued in Israel are “smart cards”—cards that contain an EMV chip.  However, converting the market requires an upgrade of existing terminals to terminals that support the standard, so that they will be able to provide customers with an advanced and secure payment experience.


In order to incentivize actors in the market to implement the EMV standard, and similar to the process undertaken in many countries where the standard was implemented, Directive 472 sets out a liability shift mechanism.  The mechanism sets out that in a case of payment using a smart payment card at a merchant where there is no EMV terminal, the acquirer is responsible for returning the charged amount to the customer when it was generated through misuse.  The acquirer is also permitted to roll over responsibility to the merchant. The objective of the mechanism is to create a situation where all businesses prepare and implement the required terminals and software, so that they bear no liability, and the market as a whole will become an advanced payments market.


The timetable for operating the liability shift mechanism was updated in the past, in view of the fact that terminals supporting the standard were not readily available.  Now, following an increase in the number of terminals deployed at merchants that support the EMV standard, and in view of the variety of terminal models offered for sale, the conditions for operating the liability shift mechanism are in place.


Accordingly, it was decided to confirm the date for starting the liability shift mechanism on January 1, 2019, so that a merchant that doesn’t support transactions with the EMV standard and continues to work with the magnetic stripe method will be exposed to fraud damages.


However, it was decided that with the aim of helping small businesses and make it easier for them to implement the standard, they will be given an additional period to prepare.  Therefore, for businesses with a transaction turnover of no more than NIS 5 million vis-à-vis the acquirer, the liability shift mechanism will be imposed on them beginning on January 1, 2020.


For large businesses that have not yet installed EMV-supporting terminals, but have installed the required software, it is recommended to prepare rapidly, so as not to absorb the liability shift in the case of fraud.


Customers who hold credit cards are already prepared with a “smart” card (with a special chip) that is in line with the new method, and must therefore get used to typing in the card’s code when making a purchase, as done when paying in European countries and in the US.