Israel to Abolish Fees for Returned Checks, Lower Debit Card Costs
Translated & summarized from Vesty by baba
The story in 5 lines · by baba
- Israel abolishes fees for technically returned checks starting October 1.
- Debit card fees will be capped at 7 shekels monthly.
- New payment account system with fixed transaction fees starts July 2027.
- Banks can adopt new fees early but are unlikely to do so.
- Several other banking fees are also being eliminated or limited.
Starting October 1, Israel will implement the first phase of a reform by the Bank of Israel aimed at reducing banking fees for customers. The most significant change will affect debit cards, with a maximum monthly fee capped at 7 shekels, down from the current average of 9 shekels. With approximately 1.8 million debit cards in circulation, this reduction is expected to save cardholders tens of millions of shekels annually.
Additionally, several outdated fees are being eliminated. Banks will no longer be able to charge for account searches or for handling matters related to inheritance. Crucially, the fee imposed on the issuer of a check returned for technical reasons will be abolished entirely. The cost for changing a mortgage payment date will be limited to 5 shekels for the first four changes within a year.
A separate change, effective July, will remove the mandatory three-year fee exemption for debit cards that banks were previously required to offer. The second, more substantial phase of the reform is scheduled for July 1, 2027. This phase will transition all customers to a default "payment account management" service, replacing the current system of paying for each individual transaction. Under this new system, a package of 100 basic transactions will cost no more than 10 shekels per month, with a maximum of 5 shekels for customers making two or fewer transactions monthly.
While banks can opt to adopt the new fee structure earlier, starting October 1, it is considered unlikely due to the necessary system upgrades and the anticipated reduction in commission-based revenue. Despite the potential for banks to gain a competitive edge by offering lower fees sooner, the article notes that competition in Israel's banking sector is not particularly high. The text recalls a past instance where Mizrahi-Tefahot Bank preemptively implemented a new law regarding deposits, but suggests that fee structures are a different matter, and customers have historically shown little inclination to switch banks despite dissatisfaction with fees.
Read the original at Vesty
