Israel Fintech Digital Payment Market Size | 2019-2033

Israel Fintech Digital Payment Market Size and Forecast by Type, End Users, Industry, Payment Method, Transaction Value, and Transaction Types: 2019-2033

Report Format:     | Pages: 110+
Type: Parent Industry Monitor | ID: FIN4441  | Publication: Updated May 2025  |  US$495  |  

Israel Fintech Digital Payment Market Growth and Performance


  • The Israel fintech digital payment market size is expected to generate US$ XX.69 Billion in revenue by 2033, with a projected Compound Annual Growth Rate (CAGR) of XX.1%.
  • By 2032, XX% of the total revenue in the Israel fintech digital payment market will be derived from IT and Telecom end user.

Israel Fintech Digital Payment Market Outlook

Israel fintech digital payment market is undergoing a rapid and revolutionary transformation, propelled by technological innovation, public policy shifts, and evolving consumer behaviors. As the country navigates the complexities of introducing a Central Bank Digital Currency (CBDC)—the Digital Shekel—it continues to solidify its position as a global fintech hub. With growing digital wallet usage, advanced payment systems, and AI-driven security protocols, Israel is at the forefront of digital finance innovation.

 

In early 2024, the Bank of Israel completed the high-level design phase of the Digital Shekel, opening the doors to public feedback. This digital currency would be accessible to all Israeli residents, including children, tourists, and local businesses. The currency will be convertible at a 1:1 rate with the Israeli New Shekel (ILS), ensuring continuity and ease of adoption. Key features such as offline functionality, instant final payments, and 24/7 transaction availability make it an attractive proposition in both emergency and everyday scenarios. While the central bank would issue the currency, private Payment Service Providers (PSPs) will play a critical role in customer onboarding, wallet services, and financial innovation.

 

The initiative hasn’t been without its critics. A recent public survey conducted by the Bank of Israel revealed that 51% of respondents expressed interest in using the Digital Shekel. However, the study received scrutiny for potential sampling bias, as it leaned toward tech-savvy participants and underrepresented marginalized groups. Concerns over financial surveillance, data privacy, and wallet balance restrictions surfaced as key deterrents for some. Although 70% of respondents claimed to trust the Bank of Israel, the shadow of future government overreach continues to spark debate.

 

Despite these concerns, Israel payment market shows unprecedented growth in digital wallet usage, which could potentially lay the foundation for successful CBDC adoption. In February 2024, spending through digital wallets hit a record NIS 4.591 billion—an 87.3% increase compared to the previous year. These wallets accounted for nearly 28% of all in-person public spending, highlighting their growing integration into the lives of Israeli consumers. Even during the disruptions of the “Iron Swords” conflict, the resilience of the digital payment infrastructure remained evident, with usage quickly rebounding in the months that followed.

 

This strong consumer appetite for modern financial tools is further emphasized by the rise of fintech innovators like Tapcheck, an Israeli startup offering on-demand pay solutions. With over $225 million raised in funding—including $200 million in credit facilities—Tapcheck enables employees to access earned wages before payday, reducing financial stress and enhancing productivity. Its platform, which integrates seamlessly with more than 300 payroll systems, is provided at zero cost to employers and has led to over $1 billion in early wage disbursements since 2019. This fintech success story not only exemplifies Israel’s vibrant startup culture but also shows the expanding use cases for real-time digital payments in employment and HR tech.

 

Israel embrace of artificial intelligence (AI) in the digital payment sector is another major driver of innovation. AI technologies are being employed to streamline operations, optimize payment processing, and strengthen fraud detection systems. Machine learning algorithms now monitor transactional behavior in real time to detect suspicious activities, significantly lowering fraud rates. AI is also being used to deliver personalized customer experiences through features like voice payments, predictive analytics, and automated financial planning tools. The Money TLV AI Payments conference in Tel Aviv showcased how fintech companies are leveraging AI to improve merchant support, reduce transaction fees, and boost acceptance rates.

 

However, not all technological advances come without risk. The increasing sophistication of AI-driven scams has become a pressing concern in Israel crypto ecosystem. Fraudsters now use deepfake videos, celebrity impersonations, and fake trading platforms to deceive users, leading to millions lost in cryptocurrency scams. The absence of a clear regulatory framework for digital assets only exacerbates the problem, creating a fertile ground for exploitation. These developments highlight the urgent need for comprehensive fintech regulations to safeguard consumers and strengthen public trust.

 

To address these concerns and promote innovation, the Bank of Israel has launched the “Digital Shekel Challenge,” a sandbox environment inspired by the BIS Innovation Hub’s Project Rosalind. The initiative aims to foster collaboration between government bodies, academia, and the private sector to develop real-time CBDC payment systems. It encourages participants to build interoperable applications using open APIs, although fully decentralized or permissionless systems are not yet part of the initiative.

 

Globally, Israel is aligning itself with a cautious but forward-thinking trend in CBDC adoption. While countries like the Bahamas, Jamaica, and Nigeria have already launched digital currencies, over 60 nations are still in the exploratory or pilot phase. The Bank of Israel's deliberate and consultative approach—focused on public participation, privacy safeguards, and universal access—suggests that the final decision on the Digital Shekel's rollout will only be made after 2026, following extensive testing and policy review.

Israel Fintech Digital Payment Market Scope

Analysis Period

2019-2033

Actual Data

2019-2024

Base Year

2024

Estimated Year

2025

CAGR Period

2025-2033

 

Research Scope

Type

Fintech Digital Commerce Market

Fintech Mobile POS Payments Market

Fintech Digital Remittances Market

End Users

Individual Consumers

SMEs

Medium-sized Enterprises

Large Enterprises

Industry

IT and Telecom

Media and Entertainment

Energy and Power

Transportation and Logistics

Healthcare

BFSI

Retail

Manufacturing

Public Sector

Other

Payment Method

Credit Cards

Debit Cards

Bank Transfers

Digital Wallets

Cryptocurrencies

Prepaid Cards

Buy Now, Pay Later (BNPL)

Transaction Value

Micro Payments

Small Payments

Medium Payments

Large Payments

Transaction Types

Business-to-Consumer (B2C)

Business-to-Business (B2B)

Consumer-to-Consumer (C2C)

Consumer-to-Business (C2B)

 

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