Mizrahi Tefahot Bank (TASE:MZTF) will issue credit cards bearing its own Mizrahi Tefahot logo with two credit card companies. Sources inform ''Globes'' that the bank recently signed an agreement with Isracard Ltd. for the joint issuance of brand credit cards. The agreement follows an agreement with Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa) signed in November 2008.
The agreement with Mizrahi Tefahot Bank enables Isracard to block ICC-Cal's exclusivity on issuing Mizrahi Tefahot brand credit cards, which would have given ICC-Cal a substantial share of the bank's customers. In the past year, Isracard feared that its market share was eroding among the bank's customers.
Mizrahi Tefahot Bank has been in negotiations for the past four years with all of Israel's credit card companies for issuing its own brand credit cards. In April 2008, negotiations with Isracard collapsed and the bank opened exclusive talks with ICC-Cal. Initially, the negotiations were for a single vendor, but it is now clear that the bank intended to work with two credit card companies.
Most Mizrahi Tefahot Bank customers currently have credit cards from either Isracard or ICC-Cal. Isracard is dominant, with 260,000 of the 320,000 credits cards held by Mizrahi Tefahot Bank customers.
Isracard is owned by Bank Hapoalim (TASE: POLI) and ICC-Cal is owned by Israel Discount Bank (TASE: DSCT) and First International Bank of Israel (TASE: FTIN1;FTIN5).
In the past two years, Mizrahi Tefahot Bank has also issued a small number of Leumi Card Ltd. credit cards. Leumi Card is owns by Bank Leumi (TASE: LUMI) and Azrieli Group.
Published by Globes [online], Israel business news - www.globes-online.com - on August 23, 2009
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