The entry of Google Pay's online payment system to Israel, alongside Apple Pay, has significantly increased the use of digital wallets in the country. Online payments increased from four million to six million between November and December 2021. 

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In December, 600 million shekels ($192 million) in payments were made online compared to just 18.11 million ( $5.8 million) when Apple Play was first introduced in April of last year. 

Around 800,000 Israelis are estimated to have downloaded an online payment app, be that Google Pay, Apple Pay, or a digital wallet from the Israel Credit Cards Company, Max, Leumi Digital, Isracard, PayBox, Bit Pay, or AnyPay. Of the 800,000 who downloaded an online payment app, 510,000 opted for Apple Pay, while the remainder were those with Android operating systems on their cellphones. Among those with Apple Pay, 330,000 consistently used their digital wallet to make payments, as did 140,000 Android users.

According to the Automated Bank Services company, which manages Israel's credit card payment system, Google Pay's entry into the digital wallet market in early December led to a 42.4% increase in online payments. Around 592 million shekels ($190 million) were paid online in December compared to 416 million shekels ($133 million) the previous month. Since Apple Pay's entry into the Israeli digital wallet market, online payments have increased 33%.

Israeli credit card expenditures increased 15.96% to over 346 million shekels ($110 million) from 2020 to 2021. ATM withdrawals increased 13.5% to slightly over 62 billion shekels ($20 billion) in 2021 compared to 54.60 billion shekels ($18 billion) the previous year.

"The use of digital wallets is gradually becoming a significant part of our shopping and payment experience. We're seeing more and more circles in the public using advanced payment services," Automated Bank Services CEO Eitan Lev-Tov said.

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Six months after Apple Pay became available in Israel, smartphone users can now enjoy Google Pay.

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Google Pay can be used for purchases of over 300 shekels ($96) and is available for free download from Google Store.

To use Google Pay, a smartphone user is identified via code or fingerprint. Then they hold their device up to a business' payment terminal, and the transaction is processed. Google Pay can be used at any business set up to take EMV contact-free payments.

The Bank of Israel has instructed all businesses in Israel to install EMV systems, and the process is expected to be completed in the coming months.

In a related development, starting Tuesday, Android users who have Max credit cards are now able to use Google Pay rather than the Max smartphone app.

According to Max CEO Ron Fainaro, payment via smartphone in Israel is gaining traction a growing at an average rate of 10% per month.

"Most of the users, almost 60%, are under age 40. About 20% are aged 41-50, and the rest are over 51. I'm certain that Google Pay will increase even more the use of smartphones as a key payment method," Fainaro said.

Since Apple Pay became an option for Israeli iPhone users, the number of payment transactions conducted by smartphone jumped by several hundred percent. However, smartphone payment still comprises only some 7% of digital payments in Israel.

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