Israel’s Bank Leumi announced Thursday that it signed an agreement with Google to roll out Google Pay, the tech giant’s digital payments app for Android users, in Israel.
According to the deal, Leumi bank customers will be able to use Google Pay, as well as Leumi’s existing digital wallet, Pepper, to make purchases in stores and online.
The date of the launch remains undisclosed. Google had initially planned to introduce the Pay app into the Israeli market during the third quarter of the year but the rollout is expected to take place later, in the winter. The company is said to still be finalizing how the Pay app will be accessible in Israel.
Eyal Perry, head of the digital department at Bank Leumi, said in a statement that the bank was proud to be the first to introduce Google Pay to its customers. Leumi, he said, was committed to open banking and collaborations with technology companies, with the aim of providing its customers with a wide range of innovative products.”
Rival digital wallet Apple Pay launched in Israel in May. According to a report in the Calcalist business daily at the time, an estimated 200,000 local users signed up then, making it the largest digital wallet in Israel thus far.
The entry of the foreign digital wallets to Israel is likely to create competition for Israeli lenders that offer their customers their own digital wallets. In addition to Leumi’s Pepper app, Israel Discount Bank’s PayBox app and Bank Hapoalim’s Bit app have also been on the market for several years and are widely used. According to a January report in Haaretz citing banking sources, the Bit app has 80% of the market by value of transactions and some 2.5 million users.
In Israel, most businesses have deployed EMVs, payment terminal infrastructure, which allows for cashless payments via digital wallets or smart credit cards. In July 2021, smart terminals made up 79% of all terminals in Israel (Hebrew) and 72% of transactions were made on EMV.
According to a Globes report in May, Google plans to offer not only its digital wallet to the Israeli public but also its Plex program, which enables Google Pay users to open a bank account through a partnership with 11 banks. The Plex accounts are said to have no monthly fees, overdraft charges or minimum balances.
The tech giant recently launched a major redesign of its payments app, keeping its core features intact but adding help for users to manage their personal finances.
Google says more than 150 million people in 30 countries use Google Pay on a monthly basis.