The Israel Securities Authority (ISA) has granted payment institution licenses to four international fintech firms: Revolut, Rapyd, Mesh Payments, and Airwallex.
These licenses enable the firms to operate in Israel under regulated conditions.
According to Calcalist, the licenses authorise the companies to provide services including money transfers, foreign currency exchange, digital wallet operations, and interest-bearing accounts.
All services will be supervised by the Securities Authority, headed by Inbal Polk, Director of Investment Management.
The decision aligns with the Authority’s broader strategy to promote competition in Israel’s financial services sector.
While these companies currently have a limited presence in the country, the new licenses are intended to support expansion and offer alternatives to services provided by domestic banks.
“It was important for us to allow them to offer interest despite opposition from the Bank of Israel,”
said Seffy Zinger, Chair of the Israel Securities Authority.
“We felt it was the right step, because for payment companies to effectively compete with the banking system, they must not be restricted. They need to provide the broadest possible service. In the future, we would also like to see companies successfully integrate securities trading.”
License holders are subject to regulatory obligations, including the segregation of customer funds from company assets, compliance with anti-money laundering and counter-terrorism financing rules, and adherence to consumer protection laws.
These laws require transparency in payment contracts, clear disclosure of terms, and safeguards against misleading practices.
According to Polk, the firms are expected to focus on underserved segments, such as digital financial management tools for children and more affordable cross-border transactions.
The Authority also indicated that the licensing framework could be extended to non-fintech platforms in future, enabling wider provision of financial services to Israeli consumers.
Featured image credit: Edited by Fintech News Middle East, based on image by Shai Pal via Unsplash
