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Israel: fintech & payments regulation

Regulated

Israel fintech & payments: Bank of Israel oversight under Payment Services Law 2018 and Banking Ordinance

Lead regulator:
Bank of Israel
Key law:
Payment Services Law, 5778-2018
Last updated:
2026-07-12

The Bank of Israel serves as the primary regulator for fintech and payment activities, operating under the Payment Services Law, 5778-2018, which mandates licensing for payment service providers. The regulatory framework is further supported by the Banking Ordinance, 1941, and the Banking (Licensing) Law, 1981, which govern banking corporations and their specific financial activities. Recent directives have focused on aligning operational conduct with these laws, including strict requirements for broker-dealer activities and advanced payment services. The regime emphasizes consumer protection, risk management, and the formalization of digital payment channels.

Who regulates

  • Bank of Israel

    Primary supervisor for banking corporations, payment service providers, and financial market conduct.

    [1][2][3]

Core laws & rules

  • Payment Services Law (2018)

    Establishes the licensing and regulatory framework for payment service providers, including requirements for payment applications and advanced payment services.

    [3]

  • Banking Ordinance (1941)

    Regulates banking corporations, restricts unauthorized use of banking terminology, and empowers the Supervisor of Banks to enforce proper conduct.

    [1]

  • Banking (Licensing) Law (1981)

    Mandates licensing, capital requirements, and operational oversight for all banking corporations under the Governor of the Bank of Israel.

    [2]

Licensing & registration

  • Payment Service Provider

    Licensing is required for entities providing payment services under the Payment Services Law, 2018, with specific directives governing advanced payment services and disclosure standards.

    [3][4]

  • Banking Corporation

    Entities operating as banking corporations require a license under the Banking (Licensing) Law, 1981, evaluated by a Licensing Committee based on business plans and capital adequacy.

    [2]

Restrictions & warnings

  • Banking corporations engaging in broker-dealer activities must comply with strict corporate governance, risk management, and internal control standards as per Directive 03/24.

    [5][6]

  • Payment card issuers and current account managers must disclose specific transaction data and adhere to strict disclosure standards for advanced payment services.

    [3][4]

  • Merchant acquirers are permitted to refuse services to merchants suspected of fraud, deception, or unfair influence, based on defined reasonable refusal criteria.

    [7]

Direction of travel

  • The regulator continues to refine operational directives, such as extending compliance deadlines for broker-dealer activities and adjusting requirements for new banking corporations to foster competition while maintaining stability.

    [8][9]

  • Recent amendments focus on enhancing consumer protection through improved debt collection procedures, remote account opening, and robust identification methods for e-banking services.

    [10][11]

Sources

  1. Banking Ordinance, 1941 · 2025-05-19
  2. Banking (Licensing) Law, 5741-1981 · 2024-12-30
  3. Advanced payment services · 2022-12-26
  4. Directive on Disclosure Requirements for Advanced Payment Services · 2022-06-13
  5. A Banking Corporation’s Activities as a Broker-Dealer · 2024-04-09
  6. Proper Conduct of Banking Business Directive No. 461: A Banking Corporation’s Activities as a Broker-Dealer · 2023-07-19
  7. Bank of Israel Amendment to Proper Conduct of Banking Business Directive Regarding Merchant Acquirers · 2018-12-23
  8. A Banking Corporation’s Activities as a Broker-Dealer · 2024-04-09
  9. Bank of Israel Adjustments to Proper Conduct of Banking Business Directives for New Banking Corporations · 2022-03-15
  10. Bank of Israel Circular C-06-2627: Amendments to Proper Conduct of Banking Business Directive no. 450 · 2023-08-13
  11. Bank of Israel Circular on E-Banking Amendments · 2020-12-30

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This guide is compiled automatically from 11 primary-source documents published by Israel's regulators, reviewed by RegAlert, and refreshed monthly (last updated 2026-07-12). It is not legal advice — always confirm requirements with the regulator or local counsel before acting.