Isracard Ltd. and Leumi Card Ltd. today signed a cross clearing agreement for Isracard brand. The agreement was signed even as lobbyists for rival Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa) were recruiting MKs to discuss Isracard's alleged refusal to reach a cross clearing agreement.
Sources inform ''Globes'' that the two companies signed the agreement after the Bank of Israel intervened. Yesterday, Supervisor of Banks David Zaken ordered Isracard to withdraw its demand that Leumi Card issue 20,000 Isracard credit cards as a condition for clearing.
Isracard's demand that, as a condition for clearing its cards, the other companies would issue Isracard credit cards was the bone of contention that had delayed the agreement until now.
Israeli businesses pay an estimated additional 0.3% on transactions because of the absence of cross clearing of Isracard cards. This different should disappear under conditions of full competition. Small business should see a drop in the business commission. Whereas large businesses have the bargaining power against Isracard, which charges them only small extra commission above the business commission (currently 0.975%), small businesses that want to work with Isracard pay a higher commission.
Published by Globes [online], Israel business news - www.globes-online.com - on April 18, 2012
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