The Bank of Israel has issued a framework providing international payment service providers access to regulated payment systems in Israel.
Effective immediately, this framework enables such entities to provide services to the public in Israel, relying on a license issued in a foreign country. The central bank expects this announcement to bolster innovation in the payments arena and to spur entry of new market participants.
The framework formulated by the Bank of Israel establishes two tracks, as set forth below. It's based on an exemption granted to entities licensed in recognized countries as established by Ministry of Finance regulations specifying conditions for providing licensing exemptions to entities providing financial asset services in Israel.
This framework will enable these entities to prepare the technological connection to regulated payments systems, and for some of them, will enable full activity in such systems, based on their foreign-issued license. The Bank of Israel’s framework enables such entities to proceed without waiting for final legislation of the Payment Services Regulation Law which is currently being formulated in Israel and is expected ultimately to become effective.
Payment and Settlement Systems Division Director Mr. Oded Salomy said, “Providing access to regulated payment systems in Israel by international payment service providers will increase competition and lead to more diverse products offered to the Israeli public in the payments arena, and ultimately in other financial service sectors deriving from payments.
We invite prospective new players that meet the exemption requirements to contact the Payment Systems Oversight Division at the Bank of Israel, to receive consultation and advice on how best to access local payment systems.”