On May 31, ISR ISA said it will license payments fintechs in new law.
ISR ISA said Regulation of Payment Services and Payment Initiation Law 5783-2023 will allow its licensed companies to offer payment and digital wallet services to the public and businesses, in competition with banks and credit card companies.
Document dated May. 31, 2023, received Jul. 3, and summarized on Jul. 6, 2023.
Law was approved by Knesset in 2nd and 3rd readings as part of the state budget and economic plan 2023-24, with ISR ISA as non-bank payment service provider regulator.
ISR ISA will supervise/develop Israel’s payment services industry by licensing firms.
Will allows fintech firms to compete for financial services and progress open finance.
They will be able to offer services such as: payment transactions and instruments; payment initiation via bank transfer; manage payment accounts via digital wallets.
The law also regulates an alternative payment type - payment initiation - for e-commerce payments without cards and should simplify existing bank transfer process.
Licensed firms can also potentially connect to central payments systems (supervised by ISR CB), for faster, safer and cheaper payments plus reduced brokerage costs.
Next Steps
ISR ISA to issue provisions/regulations for obtaining a license as legal implementation.
Currently until Jan. 2024, US, EU, UK licensed firms under AML/CFT supervision can offer services under international licenses - this will now be extended until law in force.
