The Bank of Israel has recently announced that it will allow mobile financial payment apps Bit and PayBox to charge fees, but with certain restrictions in place. These two apps are extremely popular and have a large user base, but because they currently do not charge for their services, banks are losing money.
Due to the lack of profitability in supporting payment applications without transfer fees, Bank Leumi does not offer such services at all. Isracard also attempted to organize a payment application but soon ceased these efforts. As a result, the market has been dominated by Bit and PayBox, with Hapoalim and Discount banks financing them at a loss. This situation has led to concerns that one of the mobile payment application operators may cease operations, leading to a lack of competition or both applications closing down.
To address these concerns, the Bank of Israel has permitted PayBox and Bit to charge fees to users whose transfer turnover exceeds 25,000 shekels per year. Currently, the majority of users do not reach this threshold and will be able to continue using the applications for free. This decision aims to ensure the sustainability of these payment services for Israeli users in the long term.
