MASAV

MASAV is Israel’s banking settlement center and a central retail payments infrastructure for electronic shekel credits, debits and transfers. Operated by Banking Settlement Center Ltd., it supports salary payments, tax payments, supplier payments, authorized direct debits and faster account-to-account payments, and is overseen by the Bank of Israel.^[1]

Overview

MASAV, an acronym commonly used in Israel for the Banking Settlement Center, operates payment systems that sit between banks, payment participants, public-sector bodies, businesses and other organizations. Its principal function is not to act as a commercial bank for the public, but to provide infrastructure through which authorized participants transmit payment instructions and settle obligations between accounts. In the Israeli payments architecture, MASAV is identified by the Bank of Israel as the operator of the Debits, Credits and Transfers system, a major retail payment system for non-paper-based shekel instructions.^[1]

The system is used for recurring and bulk payments as well as for immediate retail account-to-account payments. The Bank of Israel describes the Debits, Credits and Transfers system as an electronic system for settling shekel transactions that are not paper-based, including account debit authorizations, salary payments and tax payments.^[2] MASAV’s own public description emphasizes credit transfers, direct debit services, immediate payments, payment requests and information services for organizations and financial institutions.^[3]

MASAV is part of a broader Israeli payments landscape that includes the Bank of Israel’s ZAHAV real-time gross settlement system, the paper-based checks clearinghouse, card infrastructure operated by Shva, the Tel Aviv Stock Exchange Clearing House, and international settlement arrangements such as CLS for foreign-exchange transactions.^[4] In this setting, MASAV is mainly associated with retail and organizational payment flows rather than high-value gross settlement.

History and ownership

MASAV states that the company has operated since 1982 and that it is a banking corporation owned by five Israeli banking groups: Bank Leumi, Bank Hapoalim, Israel Discount Bank, Mizrahi-Tefahot Bank and First International Bank of Israel.^[5] The Bank of Israel’s 2013 announcement similarly described MASAV as a company owned by those five banks when the central bank declared its system a controlled payment system.^[6]

The ownership structure reflects the historical development of common banking utilities in Israel. MASAV was created as shared infrastructure serving the banking system and its customers, rather than as a competitive consumer-facing payment brand. Over time, the user base of the infrastructure expanded beyond banks to include large employers, government entities, utilities, charities, fintech-related service providers and other organizations authorized to send payment orders through participants.

Because MASAV operates infrastructure used by multiple banks and organizations, its governance and access arrangements are significant for competition and operational resilience. The Bank of Israel has stated that expanding access options for nonbank payment service providers to systems including MASAV’s Credits, Debits and Transfers system and Faster Payments system is part of a broader effort to make the Israeli payments market more competitive, fair and efficient.^[7]

Role in Israel’s payment system

MASAV is primarily an automated clearing house for electronic retail payment instructions. The Bank of Israel categorizes its activity as including two main components: automated clearing house activity for deferred electronic debit and credit instructions, and faster payments activity for real-time retail payments.^[4]

The deferred ACH function covers common business and household payment uses. Employers can send salary files; organizations can pay suppliers; government bodies can make or receive payments; and service providers can collect authorized direct debits from customers. In these cases, payment instructions are typically processed in batches and settled through the banking system according to the rules and timetables of the relevant system.

The faster-payments function is designed for immediate credit instructions. The Bank of Israel states that MASAV’s faster payment system enables participants and organizations to send immediate credit instructions, with transmission of the instruction and final availability of funds for the recipient occurring in real time or very close to real time. The central bank describes the beneficiary’s funds as becoming available in immediate and final form within 5–7 seconds from issuance of the payment instruction.^[1]

MASAV is not the same as the Bank of Israel’s ZAHAV system. ZAHAV is Israel’s real-time gross settlement system and is used for final settlement of large-value payments in real time, while MASAV is used for retail payment clearing and account-to-account instructions.^[4] However, the systems are connected within the national settlement architecture. The Bank of Israel has described ZAHAV as serving as a “clearing house of clearing houses,” with payment systems including MASAV transmitting multilateral payment instructions for final settlement in predefined windows.^[8]

Main services

MASAV’s credit transfer service enables organizations to make payments to multiple recipients, including employees and suppliers. Such bulk payments are an important use case for an ACH system because they allow one originator to transmit many payment instructions through structured files rather than initiating each transfer separately through a bank branch or online banking interface.^[3]

The direct debit service supports collections from bank accounts under authorization. The Bank of Israel describes direct debit transactions in the MASAV system as charges initiated by organizations under authorized debit arrangements.^[2] In Israel’s payments terminology, authorized debits are a method in which the beneficiary collects money from the payer through a bank by virtue of an authorization given by the payer.^[7]

MASAV also offers information services related to payment processing. Its public service descriptions include returned debits and credits, authorization distribution and account-holder verification.^[3] These services are operationally important because a payment system must manage not only successful payments but also rejections, returns, mandate changes and account validation processes.

The immediate payments and payment request services reflect the development of account-to-account payment functionality beyond traditional batch ACH. MASAV describes its immediate payment solutions as allowing real-time online money transfers directly to a recipient’s account and payment requests with an attached invoice that a customer approves in real time.^[3]

Participants and organizations

The Bank of Israel distinguishes between participants and organizations in the MASAV system. Organizations are entities that are party to credit or debit transactions and operate in the system based on approval granted by a participant that manages their account and is responsible for their activity.^[1] Such organizations may initiate direct credits, such as wages and payments to suppliers, and direct debits, such as account payments using authorized debit arrangements.^[1]

Participants are entities that operate in the system to execute debits or credits between participants or between end-customer payment accounts.^[1] Historically, this participant base has been closely connected to the banking system, but Israeli policy has increasingly focused on access by nonbank entities. The Bank of Israel’s payment-system access initiatives aim to create defined pathways through which licensed nonbank payment service providers can connect to core payment infrastructure.^[7]

Access matters because MASAV’s infrastructure can influence the cost, speed and range of account-based payment services available to households and businesses. If access is limited to incumbent banks, nonbank providers may need to rely on bank partnerships or indirect arrangements. If access broadens under regulatory conditions, payment institutions and fintech companies may be able to offer services using the same core systems, subject to risk, operational and licensing requirements.

Regulation and oversight

MASAV’s systems are overseen by the Bank of Israel under Israel’s payment-system oversight framework. In July 2013, the Bank of Israel declared the “credit, debit and transfer of payments” system operated by MASAV to be a controlled system under the Payment Systems Law, 5768–2008.^[6] The declaration was made alongside declarations covering card and ATM systems operated by Shva.^[6]

The Bank of Israel explained that a controlled-system declaration applies where a payment system is essential to the overall payment system and where improper, inefficient or unreliable activity may harm the payments system in the markets.^[6] The declaration enables the central bank to oversee the systems in order to ascertain their stability, efficiency and proper activity.^[6]

The central bank’s broader statutory role includes regulating payment and settlement systems to ensure efficiency and stability. In its overview of Israel’s payment system, the Bank of Israel cites the Bank of Israel Law, 5770–2010, which assigns the Bank of Israel the function of regulating the economy’s payment and settlement systems.^[7]

MASAV and Shva are also described by the Bank of Israel as regulated in accordance with the Banking Law (Licensing), 5741–1981.^[6] This dual status reflects MASAV’s character as both a bank-owned utility and an operator of a system whose functioning is relevant to the stability and efficiency of the national payment infrastructure.

Settlement, risk and resilience

Payment systems create operational, credit, liquidity and legal risks if they fail to process payments accurately and on time. MASAV’s significance therefore derives not only from the number of transactions it processes but from the dependence of employers, government entities, banks and service providers on timely settlement.

The Bank of Israel’s payment-system overview reported that in 2023 all controlled payment systems and systems operated by the Bank of Israel showed very high availability and stability levels, including 100 percent availability for the Credits, Debits and Transfers system operated by MASAV.^[7] The same report identified system availability during wartime conditions as an area of focus and stated that the strength of payment systems is essential for the functioning of the financial system.^[7]

For deferred ACH payments, settlement risk is different from real-time gross settlement. Batch payment systems may process instructions during set windows and transmit net obligations for final settlement. The Bank of Israel has explained that clearinghouses broadcast multilateral payment instructions at predefined time windows, with settlement in ZAHAV based on net recording that calculates differences between receipts and payments for each participant.^[8]

Returns and rejections are also a normal part of retail payment processing. Debits may be returned because an authorization is invalid, an account is closed or insufficient funds are available. Credits may be rejected because account details are incorrect. MASAV’s information services and system rules help participants manage these operational outcomes.

Relationship with banks, businesses and consumers

Most individuals in Israel interact with MASAV indirectly. A worker receiving wages, a household paying a utility bill by authorized debit, or a business receiving bulk payments may be using MASAV infrastructure without seeing MASAV as the front-end provider. The direct customer relationship is usually with a bank, employer, service provider or payment institution.

For banks, MASAV provides shared infrastructure that reduces the need for bilateral arrangements with every other bank or payment-originating organization. For businesses, it enables high-volume account-based payments and collections. For public bodies, it supports payments such as taxes and other transfers identified by the Bank of Israel as part of the system’s activity.^[2]

The existence of a common ACH also supports standardization. Payment files, mandate processes, return codes and settlement timetables can be handled according to system rules rather than bespoke arrangements. This kind of standardization is central to the functioning of modern retail payments, though specific technical rules may change over time.

Pricing and fees

MASAV publishes a tariff schedule for its services. The English version of the tariff page states that prices for services denominated in U.S. dollars are converted to Israeli shekels according to the official U.S. dollar exchange rate on the invoice issuance date, that prices are subject to VAT as required by law, and that shekel prices are linked to the Consumer Price Index of January 2017 with updates twice a year in January and July.^[9]

The tariff page also states that a minimum monthly payment of ₪10,000 is charged to each system participant for specified participant services.^[9] Individual line-item fees vary by service type, message type and paying entity. These fees are generally relevant to system participants and organizations rather than to ordinary consumers, who typically encounter payment costs through their bank or service provider.

Because tariff schedules can change, published prices should be treated as time-specific. For an encyclopedia entry, the important point is that MASAV operates under a documented tariff structure for participants and service users, rather than solely through ad hoc bilateral pricing.

Importance

MASAV is important to Israeli finance because it is a core account-to-account payment utility. It supports recurring debits, high-volume credits, organizational payments and newer faster-payment services. Its services affect the everyday operation of payroll, taxation, utilities, supplier payments, donations, collections and other bank-account-based payment flows.

The system’s importance is also regulatory. The Bank of Israel’s decision to classify MASAV’s Debits, Credits and Transfers system as a controlled payment system indicates that failures could have broader effects on Israel’s payments array.^[6] MASAV is therefore not merely a back-office technology provider; it is part of the country’s financial market infrastructure.

In the longer term, MASAV’s role is connected to competition in payments. The Bank of Israel has linked access to MASAV-operated systems with reforms intended to reduce dependence on the banking system and allow nonbank entities to offer advanced payment services.^[7] As account-to-account payments, faster payments and payment requests develop, MASAV remains one of the key institutions through which Israeli payment modernization is implemented.