Sources inform ''Globes'' that Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa), run by CEO Israel David, is reentering the business of clearing high-risk transactions on Internet gambling sites, now that the scandal over this activity has dissipated.
New ICC VP international operations Nicolas Lev has been intensively recruiting online gambling sites to work with the credit card company. The company is also recruiting foreign currency trading sites.
"Globes" editor Moshe Lichtman exposed ICC's online clearing activity in August 2009.
ICC said in response, "Cal undertakes and continues to undertake activity to ensure that it complies with international rules and standards in all matters related to e-commerce. In light of the measures taken by the company, Visa Europe notified it that it was permitted to resume the recruitment of new businesses. The company is preparing to renew its e-commerce activity, in accordance with the accepted standards."
For years, ICC cleared online products that other credit card companies refused to touch. ICC cleared pornography, gambling, food supplement, and other high-risk sites. This activity was highly profitable, generating at its peak 16% of the company's revenue and a quarter of its profits.
Following serious flaws in the clearing of online food supplement transactions and a high proportion of cancelled transactions, Visa Inc. (NYSE: V) and MasterCard Inc. (NYSE: MA) fined ICC millions of dollars. In January, ICC announced that it would immediately stop clearing online pornography transactions, but made no mention of gambling transactions.
Credit card industry sources believed at the time that, once ICC recovered, it would resume its clearing of online gambling and that it would even compensate itself for the loss of revenue from the other online business.
Israel Discount Bank (TASE: DSCT) owns 71.8% of ICC, and First International Bank of Israel (TASE: FTIN1;FTIN5) owns 28.2%.
Published by Globes [online], Israel business news - www.globes-online.com - on August 11, 2010
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