The Banking Supervision Department is working to enhance public awareness and to encourage the use of debit cards
- In recent years, the Bank of Israel’s Banking Supervision Department has adopted many activities to encourage the use of debit cards—cards with immediate debit.
- As a complementary process to these activities, and ahead of the Reducing the Use of Cash Law going into effect, the Banking Supervision Department is launching a public awareness campaign to encourage the use of the cards.
Supervisor of Banks Dr. Hedva Ber said, “I invite the public to become familiar with the debit card’s advantages and to increase their use of the card. Use of the card is a simple, available, and inexpensive substitute for cash, it allows better control of expenses, and helps with informed financial management.”
In recent years, the Bank of Israel’s Banking Supervision Department has adopted many activities to encourage the public’s use of debit cards, with the goal of reducing the use of cash and making the card accessible as an advanced electronic means of payment for the public. These include:
- The Banking Supervision Department required banks to issue a debit card to any customer interested in doing so. Likewise, the banks were required to initiate contact with all their customers, with an offer to receive a debit card, and to document the customer’s response to the offer.
- The Banking Supervision Department prohibited charging a fee for the debit card from a customer who has a credit card, for a period of three years.
- The Banking Supervision Department established that for someone who does not hold a credit card, debit card fees are to be lower than those for a credit card.
- The Banking Supervision Department established that a current account is not to be charged a customer-executed transaction fee for each debit card transaction.
As a result, the number of debit cards increased from 485,000 in 2015 to 820,000 in 2018, representing 9.4 percent of total payment cards.
The number of transactions executed using a debit card increased between those years from 55 million to 120 million per year.
The total value of the transactions increased from NIS 6.2 billion to NIS 13 billion.
As a complementary process to these activities, and ahead of the Reducing the Use of Cash Law going into effect, the Banking Supervision Department is launching today a public awareness campaign that was formulated in recent months and that will be distributed via the various media outlets with the goal of increasing the public’s awareness of the card’s advantages and encouraging the card’s use.
The debit card is a means of payment that is unique in that a transaction can only be executed with it if there is a balance (or authorized credit facility) in the customer’s current account balance, and the debit of the account is immediate. This is in contrast to a deferred debit card (often called a “credit card” in Israel), in which the account is debited once a month, on a specific date.
The debit card makes it possible to manage expenditures on an ongoing basis, without withdrawing and holding large quantities of cash, and it also makes it possible to make purchases and payments remotely, by phone or online.
Extensive information on the debit card, its advantages and answers to frequently asked questions about using it, are available at the Bank of Israel’s website at www.boi.org.il.