ZAHAV Payment System

ZAHAV is Israel’s real-time gross settlement system for shekel payments. Operated by the Bank of Israel, it settles payment instructions individually and finally, supporting high-value transfers between participating institutions and certain customer payments. By making settlement final as each instruction is completed, the system differs from clearing arrangements in which payments are collected and settled later as a group. ^[1]

Purpose and development

ZAHAV is a Hebrew acronym meaning “Real Time Credits and Transfers.” The Bank of Israel launched the system at the end of July 2007 as Israel’s real-time gross settlement (RTGS) platform. RTGS systems process payments one by one in real time, rather than netting a batch of payment obligations for settlement at a later point. The Bank describes ZAHAV as a system for the final settlement of large shekel payments. ^[1][2]

The system was introduced as part of changes to Israel’s payments and settlement infrastructure. An International Monetary Fund assessment published in 2012 discussed ZAHAV in the context of improvements to that infrastructure and assessed Israel’s high-value payment system against international principles for systemically important payment systems. ^[3] That historical assessment does not, by itself, describe present-day operations or constitute a current system review.

The Bank of Israel’s Payment and Settlement Systems Department operates ZAHAV. The department also operates the paper-based clearinghouse for checks and has broader responsibilities for payment-system oversight and payment policy. The Bank identifies ZAHAV as one of the payment systems it supervises, alongside systems operated by other entities, including MASAV and SHVA. ^[2]

Settlement process and finality

In a gross-settlement system, each payment instruction is settled individually rather than offset against other instructions to establish a net amount. The Bank of Israel says ZAHAV payment instructions are carried out immediately and become final when executed. It describes completed transfers as irrevocable: they cannot be cancelled through the system, and the recipient can use the funds after settlement. ^[1]

Finality distinguishes the system from the regular clearing method described by the Bank, in which transactions routed through a clearinghouse are not final during the business day. ZAHAV’s role is therefore not simply to transmit a payment message. It provides the settlement mechanism through which the payment obligation is discharged. The Bank states that settlement normally takes only a few minutes, while noting that exceptional cases may affect the time before funds are available to the recipient. ^[1]

Individual settlement supports prompt certainty about whether a particular payment has completed. For participating institutions, this matters to the management of payment obligations and the timing of funds. The system’s gross processing model also means it should not be confused with deferred net settlement, where payment instructions are accumulated and participants settle net obligations at set intervals. These distinctions describe the settlement design; they do not mean that every transfer initiated through a bank or other service is guaranteed to complete without operational checks or delay.

Participants and customer transfers

Commercial banks and foreign banks operating in Israel use ZAHAV for interbank activity, according to the Bank of Israel’s system information. The Bank also publishes information on participation, including rules and material concerning participation by non-bank entities. This provides for participation beyond banks, subject to the system’s requirements; it does not mean that every financial institution or payment provider participates directly. ^[1]

Individuals and businesses may also be able to request a ZAHAV transfer through a financial institution that offers the service. In this arrangement, the customer gives the provider instructions, while the transfer is processed through the payment system by a participant. The Bank describes ZAHAV as offering faster, final transfers for users who need to make or receive payments promptly. The availability, eligibility requirements and fees for customer-initiated transfers depend on the provider’s service terms and are separate from the system’s settlement rules. ^[1]

The Bank’s published information includes a participant list and materials on non-bank participation. Those documents, rather than the general description of the system, are the relevant references for identifying participants or understanding current joining procedures. Because participation and operational documentation can change, a participant’s status should be checked against the Bank’s current publications. ^[1]

Relationship to other Israeli payment systems

ZAHAV is one component of Israel’s broader payments infrastructure. The Bank distinguishes it from the paper-based clearinghouse, which settles physical payment messages such as checks, and from MASAV’s debits, credits and transfers system. MASAV handles deferred electronic debit and credit instructions, including standing orders and salary and tax payments, as well as a faster-payments service for real-time retail payments. ^[2][4]

These systems serve different payment needs and use different processing arrangements. ZAHAV’s principal function is final settlement of large-value shekel payments in real time. MASAV provides clearing and retail-payment services, while the paper-based clearinghouse processes check-related messages. They are not interchangeable simply because they are all part of the national payments landscape. The Bank’s description of these systems provides a basis for distinguishing the settlement role of ZAHAV from the processing and clearing functions of other arrangements. ^[2][4]

ZAHAV is also distinct from securities clearing and settlement. The Bank describes the Tel Aviv Stock Exchange clearinghouses as handling securities transactions, including the transfer of securities and associated funds. Those arrangements have their own processes, including delivery-versus-payment settlement. ZAHAV’s stated core purpose is shekel payment settlement, rather than the clearing of exchange-traded securities. ^[4]

Operating arrangements

ZAHAV operates according to published business-day calendars and system rules. The Bank of Israel publishes operating-day information for individual years, including days when the system is closed or has shortened hours. Its 2026 calendar states that the system generally operates Sunday through Friday, with shorter banking days on Fridays and holiday eves; the specific calendar lists exceptions and should be consulted for date-specific availability. ^[5]

Operating schedules matter because real-time settlement is available only while the system and relevant participants are operating. A payment instruction submitted outside the applicable service window may not settle immediately. Customers and organizations therefore need to distinguish the system’s operating calendar from their own bank’s customer-service hours and cut-off times. The Bank’s system page gives customer-facing hours, while the annual calendar details system operating days; institutions may communicate their own submission deadlines. ^[1][5]

The Bank’s ZAHAV materials also describe the adoption of ISO 20022 in Israel using a payment-message format published by SWIFT. ISO 20022 is a standard for structured financial messaging. The reference to the standard in the system information concerns message formatting and does not alter the basic distinction between payment messaging and the final settlement of funds. ^[1]

Oversight and financial infrastructure role

The Bank of Israel identifies the efficiency and stability of payment and settlement systems as important to the economy and to monetary and financial stability. Its Payment and Settlement Systems Department operates ZAHAV and oversees payment systems through regulation, assessment and examination. The Bank includes ZAHAV among the systems considered important to the broader payment network. ^[2]

As a central settlement mechanism, ZAHAV connects participating institutions’ payment obligations to settlement in shekels. Its immediate and final processing can reduce the uncertainty associated with waiting for a later settlement cycle, while its continued operation depends on the system’s rules, technical arrangements, liquidity and participants’ ability to submit and settle instructions. The Bank’s public descriptions establish the system’s purpose and operating framework, but do not alone quantify its current transaction value, volume, availability or operational risk. Such measures require dated operational or statistical publications.

ZAHAV therefore occupies a distinct position in Israeli finance: it is a central-bank-operated settlement system, not a commercial bank, card network or consumer wallet. It functions alongside retail and clearing systems, providing a mechanism for the final, real-time settlement of shekel payments. Its importance derives from that role in the financial infrastructure and from its connection to the day-to-day payment obligations of participating institutions. ^[1][2][4]