Canadian Fintech Nuvei Secures Israeli Payment Processing License

Canadian fintech company Nuvei has expanded its presence in Israel by obtaining a payment processing license from the Israel Securities Authority. This move follows Nuvei's recent $2.75 billion acquisition of Pioneer. The company sought a local license due to demand from its major retail clients, including Shein and Temu, to facilitate operations in Israel. Nuvei began the application process about 18 months ago, during the ongoing conflict, and has now received the license.

The new license will enable Nuvei's clients, such as Shein, Temu, Lufthansa, and KLM, to conduct transactions in local currency and reduce associated costs. Nuvei, a dominant player among large retailers, also plans to target Israeli high-tech companies, many of which are exporters requiring services for international payment collection. The license is for processing only, not for issuing cards, meaning Nuvei will not compete with credit card companies on card issuance and will connect to the Israeli payment system, Sheba.

"We must not underestimate the purchasing power of Israelis; they are very active online and travel extensively," stated Yuval Ziv, President of Nuvei. "Therefore, our clients are very interested in this market despite its size. We will also contribute to the Israeli economy, as foreign merchants previously had to make special efforts to receive payments from here."

Nuvei's existing Israeli operations were largely built upon its $890 million acquisition of SafeCharge in 2019, followed by the $250 million purchase of crypto payment solutions provider Simplex in 2021. The company currently employs 350 people at its Tel Aviv center, part of a global workforce of approximately 2,600. This number is expected to grow significantly upon the completion of the Pioneer acquisition, which will create a combined entity with an annual revenue run rate of about $3 billion and nearly 5,000 employees.

For end-users, Nuvei's service is transparent. However, for online stores, processing payments from Israeli customers will become cheaper, with cost savings expected to be passed on to consumers. Ziv explained that transactions with Israeli customers are currently considered international by stores, making them more expensive. The transition to Nuvei will allow Israelis to pay with local credit cards and is expected to reduce the rate of fraudulent transactions, thereby increasing revenue for merchants.