Chapter B (Regulation of Payment Services and Payment Initiation) of the Economic Plan Bill (Legislative Amendments for the Implementation of Economic Policy for the 2023 and 2024 Budget Years), 5783-2023

The law regulates the practice of new payment services, known as "payment initiation" and "payment services." Its purpose is to increase competition in the Israeli payments market, which is currently dominated primarily by banks and credit card companies. The law requires banks to provide access to their systems for external entities interested in initiating payments. These entities, known as "payment initiators," will be able to transfer funds on behalf of the customer, after the customer identifies themselves and authorizes the transaction. This will allow for a simpler and more convenient payment experience, while transferring certain responsibilities to the payment initiator. In addition, the law requires significant payment applications (P2P) to receive and send payments to other applications, and banks will be required to accept transfers from these applications. The goal of this interoperability is to reduce the "network effect" that gives a significant advantage to one application over others, and to prevent the use of monopolistic power that could lead to price increases or worsening service conditions. The law establishes a regulatory framework for payment services, based on European regulation. It is intended to balance consumer protection with the promotion of competition, and to facilitate the entry of new players into the market.

Source: חומר רקע