Antitrust Authority director general David Gilo today ordered Israel's five big banks to end their collaboration on ATMs. The order affects Bank Hapoalim (TASE: POLI), Bank Leumi (TASE: LUMI), Israel Discount Bank (TASE: DSCT), Mizrahi Tefahot Bank (TASE:MZTF), and First International Bank of Israel (TASE: FTIN). The decision is based on a review of the market, which found that the banks' collaboration is liable to cause real harm to competition in the ATM segment.
The banks collaborate on ATMs through Shva (Automated Banking Services) Ltd., which is controlled by the five banks, to provide ATM services nationwide. The banks received a restraint of trade exemption for Shva a decade ago. Gilo has now decided that Shva will sell its ATMs in a process that he will supervise, in order to create competition between ATMs.
In addition to Shva's ATMs, the banks also operate their own ATMs at branches and elsewhere around the country. The Antitrust Authority found that Israel has few ATMs in a global comparison, and decided to terminate Shva's operations.
Gilo extended Shva's permit to provide credit card and ATM clearing services, subject to various conditions. He also decided to extend the restraint on trade exemption for Banking Clearing Center Ltd. (Masav), which enables banks to transfer money, such as payments for transactions and salaries, between themselves. The extension is conditional on a long list of conditions to ensure that competition will not be affected.
Published by Globes [online], Israel business news - www.globes-online.com - on September 23, 2012
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