The Bank of Israel publishes the final criteria for entities that will be able to purchase the credit card companies that will be separated from the banks, and invites potential buyers from Israel and abroad to examine the opportunity of the purchase.

Pursuant to the recommendations of the Strum Committee, and in accordance with the Increasing Competition in Banking Law, by January 2020, Bank Hapoalim and Bank Leumi will need to sell the credit card companies they own or reduce their holdings to below 40 percent if the companies are issued on the stock exchange.  The sale may be to a controlling core that will obtain a control permit from the Bank of Israel, or through an issuance on the stock exchange and the distribution of shares to the broad public.​

The Bank of Israel has published the final document defining the criteria for who can obtain a permit to purchase a credit card company or establish and own a merchant acquirer.  The entities that will purchase the credit card companies will be able to derive benefit from the rich information databases that the companies hold regarding households and small businesses, which can help them develop and offer a variety of financial products with value for customers; the high level of expertise and experience that the credit card companies have accumulated in their areas of activity; their reputation; and the high level of capital they hold.  The companies are also expected to deal with challenges in the coming years, and the Bank of Israel will provide them with regulatory backing to support their abilities to increase competition in the settlement and credit market.  The publication of the document, in addition to the final decision regarding the path for reducing the interchange fee that is expected to be published soon, increase regulatory certainty and enable potential buyers to formulate practical plans for the purchase and operation of the credit card companies.


In accordance with the new and expanded policy set out by the Bank of Israel, the credit card companies may be purchased by any entity that is not forbidden from doing so by law, with an emphasis on the Concentration Law and the Increasing Competition Law.  These include financial or nonfinancial corporations from Israel, financial or nonfinancial corporations from abroad, private equity firms, and so forth.  The main criteria for issuing a control permit include aspects of honesty and integrity, financial strength, relevant business experience in the merchant acquirer or financial institution fields, and the lack of conflicting interests.  In addition, the investment strategies of the entities that wish to purchase the companies will be examined to ascertain that the entities intend to play a major role as a merchant acquirer and credit institution in the Israeli market, and to contribute to competition in the financial industry.


In addition to the criteria document, the Bank of Israel is publishing a presentation that contains relevant information about the companies, a summary of the criteria for granting a control permit, and the main regulatory aspects of which the purchasers must be aware.


Bank of Israel Governor Dr. Karnit Flug said, “The separation of the credit card companies from the banks is a main component of the measures to increase competition in banking, alongside other structural and infrastructural changes that we are advancing in Israel, such as the establishment of a central credit registry, the establishment of a joint technology bureau, measures to ease the transition between banks, and more.  The Bank of Israel is acting in conjunction with the relevant regulators with professionalism and responsibility so that the financial consumer in Israel will benefit from the reform.”


Supervisor of Banks Dr. Hedva Ber said, “Today we advance by another critical stage in the implementation of the reform to promote competition.  The credit card companies are mature and experienced financial companies in their fields, with good infrastructure and significant assets, such as the information databases they possess, which can serve the purchasers in expanding the companies’ activities and growth.  The meetings that we are having with potential buyers of the credit card companies and with investment houses clearly show their need for regulatory certainty.  We will therefore make sure that the regulatory environment is as supportive as possible so that the companies will be bought by serious entities and can realize the aims of the reform.  The banks also have the option of issuing the companies on the stock exchange, so that their shares are held by the broad public.”​