The Bank of Israel said it has approved a plan that will allow the public to withdraw cash from ATMs without inserting a bank card, using contactless technology similar to that used in store payments.
Under the plan, customers will be able to identify their card by holding it near an ATM reader. They also will be able to withdraw cash using a digital wallet installed on a smartphone, tablet or smartwatch.
Today, most cash withdrawals in Israel require users to insert a credit or debit card into an ATM card reader.
The change will be introduced in stages. By July 2027, contactless cash withdrawals will be available at ATMs that support the technology for customers using machines operated by their own bank.
By December 2027, customers will be able to make contactless withdrawals from any ATM that supports the technology, regardless of where they bank.
Starting in June 2027, new ATMs that do not support contactless cash withdrawals will no longer be installed. By the end of 2030, all ATMs in Israel are expected to be upgraded to support the service.
Nearly half of ATMs in Israel already have the hardware needed for contactless withdrawals, but the service has not yet been activated because regulatory approval had not been granted. The machines still require development and testing of the secure identification protocol.
Israel has many older ATMs, especially privately operated machines in kiosks, convenience stores and gas stations. These machines often charge high withdrawal fees and require costly hardware upgrades, which is why regulators are giving the market several years to adapt.
The new system will use near-field communication, or NFC, the same short-range wireless technology used for contactless payments by credit card or phone. Users will hold a card, phone or smartwatch close to the ATM reader, which will transmit the card data or encrypted digital wallet token to the machine without physically inserting a card.
The Bank of Israel said the system is expected to reduce some forms of ATM fraud, particularly schemes that rely on devices placed over card slots to copy magnetic stripe data. It could also prevent cards from being forgotten or trapped inside machines and speed up withdrawals.
Contactless ATMs have been used for years by major banks in the United States and several European countries, including Britain, Spain and Poland. Some Asian markets use other technologies, including QR codes and biometric identification.
Ofer Golan, director of the Payment and Settlement Systems Department at the Bank of Israel, said the move marks “a significant milestone” in improving Israel’s payments system.
“The contactless withdrawal service is expected to improve the level of service provided to the public and offer a more advanced, convenient and accessible user experience,” he said.