“The world of banking is traditional, heavy and old. The Chinese came and instantly proved to the whole world that it is possible otherwise, followed by the big technology companies,” says the CEO.
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Itzik Aberkhan in an investor conversation, hours after the food retailer announced that it would shut up with
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An independent finance company that will be based on Facebook and offer digital wallet services and banking products, a move that may prove revolutionary in the local payments and credit market.
As part of the collaboration, Facebook will become an independent company, owned by Discount and Shufersal, which will hold 50.1% and 49.9% respectively in the joint company. The two companies are building on the existing customer base of about 2 million members of the Shufersal Club, of which 640,000 are the chain’s credit card holders, and about 1.5 million are Facebook users, and beyond that they intend to contact customers of all banks.
In the digital wallet segment, the idea is that users will enter the Shufersal club card into the app, and will accumulate as many cash credits as they will purchase at Shufersal and Be, as well as be able to redeem digital characters of the “golden character” in networks. The non-bank cards will be issued and operated as.
The main weight of the move is actually in turning to the field of banking products. According to Shufersal and Discount, the platform will offer all the financial products sold to the public: loans, mortgages, opening a current account, securities trading and more. The parties estimate that further down the road financial advisory services will also be provided through it. “These are financial products in independent production, as well as those of fintech companies and banks,” explained Avi Zimmerman, Shufersal’s director of finance. “The great thing is that everyone is welcome to put their products with us.”
It is worth waiting and finding out how much the public will adopt some of the products that the project will offer, such as opening a current account. For example, Leumi had high hopes for Pepper as a digital bank, but were unable to get customers to transfer their current account to the app. On the other hand, it can be argued that the experience of using Pepper was not sufficient, or that the venture was simply ahead of its time, and it is possible that now is the time for such a venture and Shufersal and Discount will be able to reap the rewards.
During the conversation, Aberkhan said that he understood that “the Israeli retail world is very different from the world.” “It is inconceivable that basic things like private label and B2B could not be developed in the country because of the wisdom of the suppliers and the weakness of the retailers,” he said. “We have seen that it is possible to create a much greater synergy in the food world than we see in Israel today.”
“I think whoever has been following my activities since I joined Shufersal realized at a relatively early stage that I do not intend to freeze on the yeast, and it was clear to me that the rules of the game need to be changed from end to end to preserve Shufersal’s leadership,” Aberkhan continued. “We created a meeting with the people at Discount. Uri Levin (CEO of the bank – AP) told me ‘I understand what you want and where you are striving – I have an attractive offer for you: instead of giving you services, let’s create something together.’ It was their and my wet dream. ”
The establishment of the project is still subject to the approval of the Bank of Israel and the Competition Authority, and Aberkhan for his part is convinced that the regulator will “embrace” the move, as he put it. In this context, he referred to the publications surrounding Shufersal’s entry into the field of lending in its branches: “What riots did the banks do then! The media reported that they were stopping our move. “.
You should take things with a pinch of salt, one of the conditions for Shufersal to enter the lending field was to receive final approval from the customer to take the loan outside the sales floor. That is, it is not possible to close a deal already in the consulting complex at the branch, and the client has time to compare to competing offers, and also to regret.
In the companies’ announcement, as well as in a conversation with the investors, the statement was repeated that the venture would compete with all entities, including Discount Bank, and would not work in favor of any of the parties. Although financial products of all entities will be offered in the service, but if we are dealing with a digital marketplace, one of the tests will be how the products are arranged in the app, and whether Discount and Shufersal will choose to highlight their self-produced financial products over those of competitors.