|Despite a prohibition in the US on the use of credit cards for Internet gambling, Israelís Visa CAL credit card company is continuing to clear transactions for pornography and online gambling, reporting profits of about $9.5 million.|
Two other competing credit card companies, Leumi Card and Isracard, have refrained from clearing such transactions for ethical reasons following the passage of the US legislation last year. But, Visa CALís financial reports for last year show that the company cleared Internet business conducted by credit cards totalling around $357 million, around six percent of its total business.
Visa CAL could do even better as sources in the sector say that it has increased its activities in this area during the first quarter of the year and can expect to clear about $950 million with profits of around $23 million.
Most credit card companies' revenues in Israel come from clearing activity and clearing fees for Internet transactions are higher than average, reaching about 2.5 percent of the value of the transaction. The American prohibition on the use of credit cards for Internet gambling has caused many Israeli credit card companies, including Visa CAL, to block issued credit cards to prevent their use in such transactions.
'Without referring to figures, a substantial part of all clearing fees are paid to foreign issuers of the card and to international organizations such as Visa and MasterCard,' said a Visa CAL Spokesperson.
However, while Leumi Card and Isracard avoid all such types of activity, Visa CAL has continued to clear transactions on pornography and gambling sites that are conducted with credit cards issued overseas and have not yet been blocked by foreign credit card companies.
'These are foreign transactions conducted in a wide variety of sectors, some of which are even traded on international stock exchanges, that are unrelated to Israel and have been approved by banks worldwide,' said the Spokesperson.