Fashion and commerce chains against the high commission and don't accept American Express and Diners


by Ifi Reporter Category:Banking Jun 22, 2022

Members of the Association of Retail, Fashion and Catering chains join Max and others and call on the Ministry of Finance to allow all credit card companies in Israel to clear these brands. Today, American Express is eliminated exclusively by Isracard, and Diners is eliminated exclusively by Visa Cal. "The average clearing fee in Israel is less than 0.9%, while the clearing fees of Diners and Amex are higher than 2%. "Refuse to accept your credit card from you? Suddenly he does not pass at the checkout? This may be because you have American Express (Amex) or Diners.
Due to the high fee collection compared to competitors, many businesses defer payment from consumers who hold these cards and they are refused at the checkout: "We do not accept American Express".
The Association of Commercial, Fashion and Catering Chains seeks to change that. Its members support the intention of the Bank of Israel and the Ministry of Finance to allow all credit companies in Israel to clear both brands.
Today, Visa Cal exclusively issues the Diners brand. It itself is owned by Discount (72%) and International (28%). Isracard has an exclusivity over the issuance of American Express, "a phenomenon that has no equal in the world," the association claims.
"This is a market failure, which results in the clearing fees that small and medium-sized businesses in the country pay to the above brands being twice as high as the clearing fees they pay to other credit brands.
"The average clearing fee in Israel is less than 0.9%, while the clearing fees of Diners and Amex are more than 2%, as a result of which these companies charge NIS 200 million a year more than competitors, paid by businesses and the general public. The market share of both brands is "14%, while their share of clearing fees is 25%, twice their market share."
According to them, "American Express and Diners are allegedly threatening to leave Israel if the clearing market is opened up to competition (American Express World President Muhammad Buddy came to visit MK).
"The decision to open the market to competition is exclusive to the Minister of Finance and does not require any legislation. We call on the Minister of Finance to open the market to competition and not to fear the implicit threats that have previously affected the decision-making process."
The Ministry of Finance and the Bank of Israel have been examining for some time now the opening of the American Express and Diners card clearing competition, similar to the opening of the clearing market in 2012. Both of these brands were excluded due to Yanuka protection: they held and probably still hold a single-digit market share (which includes several hundred thousand tickets). Following the reform at the time, the rest of the credit card brands began to be eliminated by some clearers.
It is the credit company Max that is pushing to apply the reform to American Express and Diners as well, as it as a credit company is at a disadvantage because it does not have access to these two brands. It eliminates fewer brands compared to Isracard and ICC.
Max and the fashion, commercial and catering chains are demanding that the law be changed and that even small ones be allowed to be eliminated by everyone, mainly because their financial power is greater than their quantitative market share. Visa Cal and Isracard roll in hundreds of millions of shekels from high fees they charge for clearing Amex and Diners cards, which yield a net profit of tens of millions of shekels. It was claimed that lowering the commissions would save the economy hundreds of millions of shekels.



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