Israeli Credit Card Companies Demand Bank of Israel Halt Unilateral Fee Hike by Shva
Israeli credit card companies Isracard, Max, and CAL have sent an unusual joint letter to Bank of Israel Governor Professor Amir Yaron, urging him to immediately stop the unilateral increase in fees by Shva, the operator of Israel's payment infrastructure. Shva plays a critical role in the Israeli economy by routing, authenticating, and approving nearly all credit card and ATM transactions in real time. Due to its monopoly position, all banks, credit card companies, and fintech players must connect to Shva's systems, making it a vital national infrastructure.
Shva announced a significant fee increase effective August for July activity, which the credit card companies say will cost them tens of millions of shekels annually. While Shva justifies the hike by citing major investments in cybersecurity and system upgrades, the credit card firms accuse it of abusing its market power. The companies highlight that Shva reduced the monthly connection fee per terminal but nearly doubled the fee for PinPad devices, which are far more numerous, resulting in a sharp real price increase. They also note broad fee hikes including a 38% rise in fees for external transactions and a 520% increase in ATM clearing fees.
The credit card companies emphasize that these increases add to previous hikes since 2018, cumulatively raising costs by nearly 40% in about two and a half years. They reject Shva's claims that security costs justify the increases, arguing that much of the security burden falls on them and that transaction volume growth already boosts Shva's revenues. Financial data cited by the companies show Shva's profitability ranging from 29.4% to 52.3% between 2021 and 2025, with an unprecedented 60 million shekel dividend payout in 2025, benefiting major banks that hold about 40% of Shva's shares.
The timing of the complaint follows Shva's recent annual general meeting, where updated executive compensation policies were approved, including equity packages for CEO Eitan Lev Tov and Chairman Sharon Haran, alongside a salary increase to approximately 2.42 million shekels in 2025. The credit card companies have asked the Bank of Israel to exercise its legal authority to order Shva to retract the fee update at least until the regulator completes its ongoing investigation.
