The Bank of Israel Governor Amir Yaron has granted Mastercard permission to hold 10 percent of Israeli bank services firm SHVA.
Reuters News cited the central bank on Tuesday that the approval is a step aimed at boosting banking sector competition.
Mastercard got the green light after the company signed a deal to buy the stake from Israel’s Bank Hapoalim, the Bank of Israel said.
SHVA, the Hebrew acronym for Automated Banking Services Ltd, provides a large portion of the services in the payment card transaction chain in Israel.
New legislation to increase competition in the sector is forcing Israel’s largest banks to reduce their stakes in SHVA to below 10 percent.
Hapoalim rival Bank Leumi last year received permission to sell a 10 percent share to Visa.
The Bank of Israel said Hapoalim, Leumi and Israel Discount Bank are preparing a public offering to sell more of their stakes in SHVA to the public to take their holdings below 10 percent.
Supervisor of Banks Hedva Ber said the payments sector is expected to undergo changes in coming years and that adding international players that specialize in payments will boost innovation and knowledge.