Credit Card Companies Ignite Fierce Competition in Israeli Market

Ten years after the recommendations of the Strom Committee aimed to increase competition in Israeli banking services, the financial market is finally seeing a surge in activity, primarily driven by intense competition among credit card companies vying for customers. The recent acquisition of Isracard by businessman Yitzhak Tshuva and the appointment of Itamar Foreman as CEO have revitalized the company, which had struggled since its forced separation from Bank Hapoalim. Foreman's strategic move to secure the prestigious El Al Fly Card from competitor CAL has significantly disrupted the industry's status quo, fostering genuine competition for customers.

CAL, currently undergoing a separation from its owners, Discount Bank and International Bank, appeared vulnerable. Following the departure of CEO Levi Hallevi to El Al and the appointment of Yafit Griyani, formerly Isracard's deputy CEO, CAL lost one of its key assets, the El Al club, alongside its Shufersal customer loyalty program. Having previously benefited from competitors being forced to divest from banks, CAL found itself on the defensive. In response, it launched a similarly branded loyalty program, FlyAll, which quickly attracted over 100,000 users and retained them.

Meanwhile, the third major player, max, led by Shagit Dotan, which has achieved stable profits in the sector, has also been proactive. Its airline credit card, Skymax, has surpassed 100,000 customers. These aggressive marketing battles, reminiscent of historical banking sector rivalries, are expected to incur short-term costs as each company strives for rapid success, before a new equilibrium is reached. However, the original intent of the Strom Committee's legislation was to foster alternatives to the banks themselves, a goal that, at least in the foreseeable future, remains largely unfulfilled for consumers.