Another step has been taken down the road to opening up the credit card market to competition. Following lengthy months of negotiations, an understanding was reached today between Bank Hapoalim and Anti-Trust Authority director general David Tadmor. Under the understanding, Hapoalim will open Isracard and Mastercard to competition in both clearing and issuance.
The credit card market was first opened to competition about a year ago, when Tadmor reached a similar arrangement with Visa ICC, owned by the First International Bank and Discount Bank.
The arrangement was, in fact, imposed on Visa ICC, which was forced by law to allow the entry of Alphacard, owned by Bank Leumi and Aurec. In August 1998, Alphacard started issuing and clearing credit cards under a concession from the Visa International group.
Tadmor said that, following the negotiations, Hapoalim announced today that, as of September 1, 1999, the bank will no longer insist on its right for exclusivity concerning the issuance and clearance of credit cards of the Mastercard type. The bank agreed to abide by the terms Tadmor set for Visa at the time.
The significance of the agreement is that, in a few months, all banks will be able to issue credit cards of the Isracard and Mastercard type. Today, banks are already able to issue credit cards of the Visa ICC and Alphacard type. At the same time, credit card companies will be able to perform clearance services for all credit card types on the market.
Published by Israel's Business Arena July 14, 1999