The Bank of Israel prohibits the use of information about customers collected through a digital wallet – the capital market

The Bank of Israel is examining the issue of the use of customer information in the field of digital wallets. This emerges from a press release he published today. This is a sensitivity of consumer information protection that results from the retention and accumulation of information by entities in a payment order chain. The Bank of Israel intends to examine this issue, together with the other relevant parties, and, if necessary, to promote regulation on the issue.

Following the examination he conducted and on the basis of his aforesaid policy, the Bank of Israel formulated a position according to which the new ventures have to encourage competition, develop the world of payments and bring value to the Israeli consumer and that there is no room for delay, provided at this stage of payments market developments:
Information collected under a digital wallet will not be used to provide financial services or the sale of other financial products to customers with debit cards issued to them by issuers who do not own the wallet. This is until this issue is examined in all its aspects;
An open wallet will in a short period of time have the option of multiple cards from different issuers, so that customers can make use of a number of cards of their choice easily and conveniently;
The restriction imposed on the two major banks in the law to increase competition and reduce centralization in the banking system regarding credit card frameworks applies to credit cards issued or to be issued in cooperation ventures involving the two major banks, between dedicated cards for use in digital wallet and other cards, unless a bank notifies Israel, at the end of an examination it conducts, that such collaborations do not constitute a joint offering to which the aforesaid restriction applies.

The advanced payments market has undergone significant changes in recent times in general, and in the field of digital wallets in particular. These developments include offers of innovative payment services by existing players and new players, among others: Bank Hapoalim has announced that it intends to launch a digital wallet on the Beat payments app infrastructure; Discount Bank has announced that it intends to launch, subject to the required approvals, a digital wallet in partnership with Shufersal on top of the Facebook app; Bank Leumi, Max, Isracard and ICC have launched digital wallets for their customers; Various retailers are also working to offer their customers additional advanced payment options and global technology companies are expected to launch digital wallets to the public in Israel. These projects are made possible, among other things, thanks to a move led by the Bank of Israel in the past year together with all market players to implement the EMV standard in business terminals, which allows, among other things, non-contact payment (NFC) and payment using digital wallets.

The Bank of Israel’s policy regarding the development of the payments market aims to create an infrastructure that will enable market players to create innovation in the field of payments and thereby expand the range of options available to consumers and businesses in Israel to make payments, enhance customer experience, improve consumer well-being and encourage competition. The public. This position includes a long-term view of the market and the development of the means of payment in it.

Recently, the Bank of Israel has examined new ventures in the payments market, including activities in the field of existing digital wallets that are expected to develop in the near future. The examination included, among other things, a review of what is happening abroad in the field of payment wallets, deepening, researching and assessing the development of the wallet market structure in Israel and its characteristics, including meetings and discussions with various stakeholders, both government and relevant business entities.