"The foreign exchange space has enormous potential for us, and we will grow significantly in this area"
Yaron Tiktin, Deputy CEO of Cal and head of the company's consumer division, referred to the company's new foreign exchange card at the Calcalist Forecasts Conference held in collaboration with Bank Hapoalim and Phoenix.
“The foreign exchange space has enormous potential for us, and we will grow significantly in this area,” said Yaron Tiktin, Deputy CEO of Cal and head of the company’s consumer division, referring to Cal’s major push into foreign exchange with the launch of a new digital wallet.
In an interview at Calcalist’s Forecasts Conference, held in collaboration with Bank Hapoalim and Phoenix, Tiktin addressed the expected transfer of control of the company to new owners George Horesh and Harel, the impact of interest rate cuts on Israelis’ appetite for credit, and the competitive pressure Cal expects from new players such as Revolut and Rapyd, which are already gearing up for the Israeli market.
Is this really going to become a major competitive arena by 2026?
“One of the arenas, yes. We’re talking about international players entering this space, companies like Revolut and Rapyd.”
Are they a threat to you?
“Look, it’s still early to say. But what we do know is that the foreign exchange space has enormous potential, and we intend to grow there significantly.”
It’s hard to ignore the new regulation raising the tax exemption on overseas purchases to $150. Are you already seeing an impact on credit spending?
“It’s still a bit early. I speak to people regularly, and many haven’t fully internalized that this change has taken effect. People go to international sites like Amazon and still ask themselves whether this is real.
“I assume this will significantly increase the average value of transactions made abroad on online platforms. It’s too early to see the full impact, but it will come.”
Do you have an estimate of how this will affect consumption?
“All categories where typical purchases are under $150, textiles, sports goods, small electrical appliances, will be dramatically affected. Israeli retailers will have no choice but to lower prices and compete. In those categories, I expect a significant increase in activity.”
The Bank of Israel has begun a gradual process of cutting interest rates. Are you already seeing higher demand for loans?
“When there is optimism and the markets reflect optimism, people buy and invest. Lower interest rates clearly support this trend. We saw how sharply rising interest rates reduced demand, and the decline will have the opposite effect.
“It’s a gradual process, but we are already beginning to see early signs of increased demand for credit. The war has ended, the economy is returning to normal activity, and yes, we are optimistic. Lower interest rates will increase demand for credit and for investments that rely on credit.”
The Bank of Israel wants more credit companies to evolve into ‘lean banks,’ and both Rapyd and Revolut are exploring this direction. Is Cal on its way to becoming a bank?
“This is a question that will take time to answer. We need to see how regulation evolves. What I can say is that Cal is already a major player in several areas, cards and credit.
“If you look back five years, credit companies’ share of the consumer credit market grew from 10% to 17%. I assume competition will continue to open up, and credit companies will offer more and more banking products. Whether we apply for a banking license or not is a secondary question. What’s clear is that we will expand our offering in financial and banking-related services, cards, credit, foreign exchange, and more.”
Do you already see yourselves as a bank?
“We see ourselves as a strong alternative to the banking system, definitely.”
As 2026 approaches, where do you expect competition to focus, and what surprises can we expect from Cal?
“We talked about foreign exchange, we talked about credit, and I assume there will be additional surprises and new products launched down the road. Time will tell.”
Yaron, Cal is on the verge of changing hands. How are you preparing for the new owners?
“The entry of credit companies did not start today. It began five or six years ago following the Strum Committee, and I assume this trend will continue. The change in ownership, which has not yet happened, will happen soon. The direction Cal has led over the past five years will continue and even intensify.
“If you look at the credit market, what has happened since the Strum Committee, roughly from 2018 until today, you see some very interesting developments. Credit companies have increased their share of cards in the market from about 30% to 40%. That’s an increase of roughly 35% in the share of non-bank cards. In terms of transaction volume, the increase is even sharper, around 50% since 2018. The entire industry, not just Cal, is shifting from banks to non-bank players, and this trend will intensify.”
We know that George Horesh, one of the new owners, is a dominant player in the automotive market. Will Cal expand further into car financing?
“Yes. Cal has been a significant player in automotive financing for several years. Historically, Mimun Yashir led this market for many years, but Cal has entered strongly. Today, we already have a portfolio of around NIS 600 million in this field, built over a relatively short period of time.
“This is a very interesting segment, consumer credit backed by collateral. It’s a growing market, and Cal is already a meaningful player in it and will continue to be so.”
You recently entered the foreign exchange market with a digital FX card. Why is foreign exchange attractive to you, and is this the next competitive battleground?
“First, you have to understand Israelis. Israelis are a very unique population, we travel a lot, more than almost anywhere else in the world. And when we travel, we almost always transact in different currencies. Americans mostly spend in dollars. Europeans mostly spend in euros. Israelis spend in foreign currencies wherever they go.
“In addition, Israelis still purchase a surprising amount of cash. About 40% of foreign exchange turnover is done in cash. That surprised us. This is where we come in. We offer a foreign exchange wallet that allows customers to see the real-time exchange rate at which they buy or sell currency, and if they want cash, they can withdraw it from an ATM abroad. It’s a very innovative and very competitive product.”
