Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa) will stop providing clearing services for pornography websites within a few weeks. This activity accounts for 15% of the company's international revenue, and the profit margin is higher than for regular clearing transactions.
Quitting the business could reportedly cost ICC-Cal 4-5% of its profit.
ICC-Cal claims that there is no connection between the decision to stop clearing online pornography transactions and the flaws discovered in its electronic clearing activity, for which Visa Inc. (NYSE: V) fined the company €9 million in November.
An ICC-Cal spokeswoman said that the company's board of directors decided to stop clearing online pornography transactions six months ago, and that it decided to implement the decision gradually by the end of 2010. The chairman at the time was Shlomo Zhar, who was also chairman of ICC-Cal's parent company, Israel Discount Bank (TASE: DSCT).
Nevertheless, ICC-Cal said that the restructuring undertaken in the aftermath of the flaws found in its international clearing activity prompted the setting of a faster timetable to quit the online pornography clearing business.
Over the years, ICC-Cal was lambasted by many parties because of its pornography ties. A year ago, Bank Leumi (TASE: LUMI) president and CEO Galia Maor told "Globes", "Leumi Card Ltd. does not clear pornography. There were lengthy discussions about it, because the business is highly profitable, but I refused."
The Banking Supervision Department also was displeased by ICC-Cal's online pornography and gambling transaction clearing activity, and sent a clear warning that the company ought to get out of the business and find its profits elsewhere.
Discount Bank owns 71.8% of ICC-Cal and First International Bank of Israel (TASE: FTIN1;FTIN5) owns the rest. Its CEO is Boaz Chechik.
Published by Globes [online], Israel business news - www.globes-online.com - on January 7, 2010
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