Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa) and mobile carrier Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) today announced that they have signed a letter of intent to jointly develop a mobile credit card, which will turn a smartphone into an electronic wallet.
ICC and Cellcom will establish a customers club on the basis of Cellcom subscribers, whose members will receive ICC credit cards. Club members will receive various benefits and discounts. The credit cards will use near field communications (NFC) technology embedded in the smartphones.
NFC does not require swiping or direct contact of a credit card; instead it is passed over the point of sale. When an NFC chip is embedded in a mobile phone, the phone will become a credit card for paying at points of sale. Today, most payment systems in Israel are not equipped with NFC technology.
ICC, owned by Israel Discount Bank (TASE: DSCT) and First International Bank of Israel (TASE: FTIN), is Israel's third largest credit card company. It has 1.45 million active credit cards and a 25% market shares.
In view of the changes in the mobile market, Cellcom, a unit of Nochi Dankber-controlled IDB Holding Corp. Ltd. (TASE:IDBH), is seeking new sources of revenue. It says that the new venture, which "Globes" first reported in March, is a "long-term strategic measure that will be a growth engine."
Published by Globes [online], Israel business news - www.globes-online.com - on August 6, 2012
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