Revolut, Rapyd, Mesh, and Airwallex win payment licenses in Israel
New approvals aim to shake up local banking competition and slash costs for consumers.
The Israel Securities Authority has granted four international fintech companies a payment license to operate in Israel: Revolut, Rapyd, Mesh Payments, and Airwallex.
These four global fintech players currently have only modest operations in Israel. The Securities Authority hopes that by granting the licenses, these companies will expand their activity significantly and introduce new competition for services traditionally provided by local banks.
Revolut, for example, is a British fintech giant that started with limited financial services but now offers digital-only banking in 50 countries to over 52 million customers. Until now, Revolut has not offered full banking services in Israel. The company recently hired Uri Nathan, former CEO of Pepper, to head its Israeli operations.
The new license enables these companies to transfer, exchange, and clear funds, as well as operate digital wallets. They will also be allowed to offer interest on funds deposited into accounts, a step the Bank of Israel initially opposed. The official responsible for granting the licenses is Inbal Pollak, Director of the Investment Department at the Authority.
Under the new license, companies must keep customer funds separate from company funds, comply with strict risk management and anti-money laundering regulations, and follow all legal requirements to protect consumer interests. They are also bound by the Payment Services Law, which covers disclosure, contract terms, fraud prevention, and other consumer protections.
Anat Guetta, Chairwoman of the Israel Securities Authority, said: “It was important for us to allow these companies to provide interest to customers, despite opposition from the Bank of Israel. We believe payment companies need the broadest possible set of services if they are to compete with the traditional banking system.”
Guetta added that she hopes these licenses will lower costs for Israeli consumers and make it easier to transfer money abroad.
The license framework may also pave the way for non-fintech intermediary companies, such as marketplaces like Airbnb, to expand the financial services they offer Israeli customers.
