When we wanted to offer payments through Facebook, the banks said that it looks like a scam – because who would want to pay that?

Published by The Marker

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Israeli Fintech industry is growing, and local startups already allow consumers to pay with their smartphone overseas in beverage machines and manage virtual bank accounts in the US. So how come this innovation is not implemented in Israel and literally skips the Israelis?

…”The gap between the regulation of a financial institution in Israel to that applicable in the UK is light-years away,” says Doron Cohen, co-founder of the start-up Covercy. “Britain’s regulation has strict conditions, but very organized, there is a check List you must go through to operate the business. In Israel, the situation is less clear. For example, the legislator did not determine how to treat customer funds and did not define a layer of protection in order to protect the customer in case of insolvency. In addition, there are no minimum liquidity threshold requirements. Therefore, we have voluntary adopted the British model for our Israeli activity.

“In Israel we hear a lot about the openness of banks to startups and innovation. It may be the case when it concerns support system, such as cyber and risk management, but so far we have not seen Israeli banks allow Fintech companies to get closer to their core business. The German bank WireCard, for example, had given a start-up, Number26, to use its banking license and its financial infrastructure to enable it to become an almost fully supported Internet bank.”…