Israeli Shoppers to See Lower Costs on Shein, Temu Purchases
Translated & summarized from N12 by baba
Fintech company Nuvei has received a new license in Israel, which will allow international shopping sites like Shein and Temu to process payments directly in shekels. This change is expected to eliminate foreign currency conversion fees and unfavorable exchange rates for Israeli consumers. The new system will also enable more Israelis to shop on these platforms and reduce the number of blocked transactions, potentially leading to more discounts and promotions.
The story in 6 lines · by baba
- Israeli shoppers will soon pay fewer fees on Shein and Temu purchases due to Nuvei's new license.
- Nuvei's direct connection to Israel's payment system eliminates foreign currency conversion fees.
- Purchases will be processed in shekels, using official exchange rates, simplifying billing.
- More Israelis with basic credit cards will be able to shop on international sites.
- Reduced transaction blocks are expected as payments are treated as domestic.
- Cost savings for merchants may lead to more discounts and promotions for consumers.
Israeli consumers are set to benefit from reduced fees and potentially more discounts on popular international shopping sites like Shein and Temu, following a new regulatory approval for fintech giant Nuvei in Israel. This development aims to eliminate hidden charges and improve the online shopping experience for Israelis.
Previously, purchases from international sites incurred extra costs such as foreign currency conversion fees and unfavorable exchange rates. Additionally, orders were sometimes blocked due to banks flagging them as suspicious foreign transactions. Nuvei's new license allows it to connect directly to Israel's national payment infrastructure, enabling transactions to be processed in shekels as domestic purchases.
This change means that sites like Shein and Temu will process payments directly within Israel's payment network, bypassing foreign intermediaries. Consequently, consumers will no longer be charged foreign currency conversion fees, typically ranging from 1% to 3%, and the exchange rate used will be the official shekel rate, eliminating the previous practice of inflated rates that disadvantaged buyers.
The new system also opens up online shopping to a wider range of Israelis. Previously, those with basic debit cards or specific cards not enabled for international transactions were unable to purchase from these sites. Now, all Israeli credit cards will be valid, and the likelihood of legitimate transactions being blocked due to security concerns will be significantly reduced.
While AliExpress is not included in this immediate change, it's noted that the platform already utilizes its own payment infrastructure and has established specific payment solutions for the Israeli market. The cost savings for merchants are expected to translate into benefits for consumers, such as lower thresholds for free shipping, more aggressive coupons, and deeper basket discounts, even if the base price of individual items doesn't decrease significantly.
Nuvei's move, bolstered by its recent acquisition of the Israeli company Pioneer for $2.75 billion and its significant presence in Tel Aviv, introduces substantial international competition into Israel's local payment processing market. This signals that global e-commerce giants recognize the importance of the Israeli consumer market.
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