Can my US-owned Israeli company get a credit card processing account in Israel?

The company was incorporated in Tel Aviv in four days. The bank account took eleven weeks. Then the founders in Austin discovered that neither of those things is what lets an Israeli website charge a card, and that the acquirer asks harder questions than the bank did.

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Detailed Answer

Acquiring, סליקה (slika) in Hebrew, is the service that moves a card transaction from the customer to the card scheme and returns settlement to the merchant. In Israel it is provided by the credit card companies, Isracard, Cal and Max, and by licensed non-bank acquirers, with online merchants usually reaching them through a gateway. The Regulation of Payment Services and Payment Initiation Law 5783-2023 brought acquiring, payment initiation and the issuing of payment instruments into a single licensing regime, and licence applications for non-bank providers are handled through the Israel Securities Authority while the card companies remain under Bank of Israel supervision. What that means for a merchant is that the counterparty is a supervised financial institution with its own compliance file on you. Three things are non-negotiable before an application is worth making: an Israeli legal person registered with the Companies Registrar, a VAT registration as an osek murshe so the company can issue Israeli tax invoices at the 18% rate, and an Israeli bank account in the company's name, because Israeli acquirers settle to Israeli accounts and will not wire proceeds to a US bank.

The friction for an American-owned company is compliance rather than commerce. Acquirers are subject to anti-money-laundering duties under the Prohibition on Money Laundering Law 5760-2000, which means identifying the individuals who ultimately control the company: passports, proof of address, corporate documents from Delaware or wherever the parent sits, each carrying an apostille from the relevant Secretary of State, and an explanation of the business model that survives a compliance officer who has never heard of it. Where nobody with signing authority lives in Israel, the standard response is not refusal but security: a rolling reserve holding a percentage of turnover for a set period, a larger reserve for card-not-present sales, and personal information about the beneficial owner that founders often resist supplying. Two American consequences deserve a mention. Signature authority over the Israeli settlement account brings a US person inside the FBAR reporting net, and settlement into Israel rather than the United States is what makes the Israeli entity, rather than the parent, the party earning the revenue, which is the transfer pricing question the IRS asks later. If the bank account itself is still the obstacle, the document list is set out in our answer on what an Israeli business bank account application requires.

In Practice: Acquiring is a licensed activity under the Regulation of Payment Services and Payment Initiation Law 5783-2023, with non-bank licences processed through the Israel Securities Authority. Underwriting turns on the Prohibition on Money Laundering Law 5760-2000 identification of beneficial owners, so budget apostilled US corporate documents at roughly USD 20 to USD 50 per document plus courier. In our files a foreign-owned Israeli e-commerce company is quoted a merchant discount of about 1.5% to 3% on card-not-present volume and asked for a rolling reserve in the region of 5% to 10% of turnover held for 90 to 180 days. Onboarding runs two to four weeks once the Israeli bank account is open, and the osek murshe file with the Israel Tax Authority must exist before the application, not after it.

When to Consult a Lawyer

• The business sells subscriptions, digital goods or anything with a high chargeback profile. Acquirers price and reserve on that risk, and a model described loosely in the application is the reason files stall for months.
• The parent company wants proceeds swept to the United States. The settlement account is Israeli by design, and moving money out on a regular cycle raises both the bank's compliance questions and the transfer pricing question about which entity earned the income.
• You are considering trading through a US entity and invoicing Israeli customers instead. That avoids the acquirer but may create a permanent establishment in Israel, which is a far more expensive problem than a rolling reserve.

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Speak With an Israeli Attorney

We prepare the corporate and beneficial-owner file the acquirer will actually accept, coordinate it with the bank account application, and structure the settlement flow so the tax position between the Israeli company and its US parent holds up.

Contact us for a confidential initial consultation.