Payment methods in Israel - statistics and facts
In the evolving payment landscape in Israel, digital transfers have come to dominate in terms of sheer value. Still, despite the rise of digital payments, credit cards and cash remained dominant for high volume day-to-day purchases. In a recent survey by the Bank of Israel, the public was asked which payment methods they used the previous day. More than two thirds used a credit card, and over half used cash. Mobile payment apps followed as the third most common method, with many members of the public conducting an app transaction during the day prior. Israeli consumer preference for using traditional means of payment for low-value transactions was also evident in 2022 transaction data. This data showed that cards and cash together accounted for the majority share of the annual volume of transactions in the country, but only represented a minimal contribution to the total value of annual transactions.
Payment preferences vary by context
In 2023, individuals continued to differentiate between cards and cash for daily expenses and digital bank wires for large, infrequent transactions. Mobile payments, on the other hand, carved a niche for peer-to-peer payments, becoming more common among friends and family. Nearly 55 percent of Israelis used payment apps to transfer money to friends, and a significant share used it to pay a family member or give an allowance to their children. However, rent payments, which represented the highest average payment item in people’s mobile wallets, were the least common expense paid via mobile app. Interestingly, these trends did not extend to the entire population in the country. Social grouping and ethnicity significantly influenced payment channel preference. For instance, ultra-orthodox religious Israelis and the Arab community in the country were less likely to be familiar with and use digital forms of payment.
E-commerce drives card-not-present (CNP) growth
With the rise of e-commerce as a significant retail channel, Israeli buyers have become increasingly comfortable using their payment details online. In 2019, remote credit card payments surpassed card usage at the point-of-sale for the first time, continuing to grow year-on-year. By 2023, card-not-present (CNP) purchases totaled over 70 billion U.S. dollars. While credit cards dominated e-commerce payment channels, mobile payments are the next frontier. In 2023, over a quarter of Israelis used an e-wallet as their preferred method of online payment. In June 2024, digital wallets recorded monthly purchases worth over a billion U.S. dollars, reflecting considerable growth compared to June 2023.
Payment preferences vary by context
In 2023, individuals continued to differentiate between cards and cash for daily expenses and digital bank wires for large, infrequent transactions. Mobile payments, on the other hand, carved a niche for peer-to-peer payments, becoming more common among friends and family. Nearly 55 percent of Israelis used payment apps to transfer money to friends, and a significant share used it to pay a family member or give an allowance to their children. However, rent payments, which represented the highest average payment item in people’s mobile wallets, were the least common expense paid via mobile app. Interestingly, these trends did not extend to the entire population in the country. Social grouping and ethnicity significantly influenced payment channel preference. For instance, ultra-orthodox religious Israelis and the Arab community in the country were less likely to be familiar with and use digital forms of payment.
E-commerce drives card-not-present (CNP) growth
With the rise of e-commerce as a significant retail channel, Israeli buyers have become increasingly comfortable using their payment details online. In 2019, remote credit card payments surpassed card usage at the point-of-sale for the first time, continuing to grow year-on-year. By 2023, card-not-present (CNP) purchases totaled over 70 billion U.S. dollars. While credit cards dominated e-commerce payment channels, mobile payments are the next frontier. In 2023, over a quarter of Israelis used an e-wallet as their preferred method of online payment. In June 2024, digital wallets recorded monthly purchases worth over a billion U.S. dollars, reflecting considerable growth compared to June 2023.
