Irish banks abandon Revolut rival plan after series of delays
Joe Brennan
The three remaining Irish retail banks have abandoned plans to set up a
mobile payments app that was designed to rival Revolut, after the
project was hit by setbacks and drift in the three years since it was
hatched.
“Synch Payments DAC, the Irish instant mobile account to account
payments service, today announced that following a careful and
considered review of its business plan, it has reached the difficult
decision that it is no longer feasible to launch its payments app,
Yippay, into the Irish market and Synch will cease operations,” said a
spokeswoman for Synch.
“A combination of factors has contributed to an elongated time frame to
launch which makes the original Synch proposition no longer viable.”
The country’s main banks decided in 2020 to set up Synch with the aim of
establishing an instantaneous money-transfer mobile app. The move
underscored at the time how Irish lenders were behind the curve in
having the technology in place to join the Single European Payments Area
(Sepa) instant payment system.
While the project had been subject to a series of setbacks in the past
few years – amid issues over clearance from competition and financial
regulators and the exit of one of its founding members, KBC Bank Ireland
– the payments landscape has moved on.
The European Commission and European Central Bank (ECB) are currently
pushing for the wider adoption across the euro zone of Sepa Instant,
which currently only accounts for about 14 per cent of all conventional
Sepa transfers.
Irish retail banks are “committed to and actively working on the rollout
of SEPA Instant, the EU’s instant payments scheme, which seeks to allow
consumers and businesses send and receive payments in euro across Europe
in less than 10 seconds”, said a spokeswoman for Banking and Payments
Federation Ireland (BPFI).
Political agreement was reached last week between the European Council
and European Parliament on planned rules on instant payments. “This is a
significant priority programme which has already been mobilised by BPFI
members and it will result in universal instant payments across the EU
which are affordable and more secure,” the spokeswoman added.
Meanwhile, the ECB’s recent decision to proceed with the next phase of a
plan to introduce a digital euro is also destined to shake up the
industry, by enabling people in the euro zone to make electronic
payments securely and free of charge. The ECB said last month it would
start a two-year “preparation phase” for the digital euro on November
1st, in which it would finalise rules, choose its private-sector
partners and do some “testing and experimentation”.
Synch hit an initial stumbling block in January 2021 after the
Competition and Consumer Protection Commission pushed back the banks’
application to establish a joint venture, saying it was unable to
determine from the initial filing whether the planned transaction was a
merger or acquisition within the meaning of Irish competition laws.
A subsequent refiling of the plan ended up going through an in-depth
competition investigation, before being approved with conditions in June
2022.
In July, the remaining shareholders in Synch, AIB, Bank of Ireland and
PTSB, said that they had ben informed by the Central Bank that the
business plan required authorisation as an account information service
provider (AISP) and as a payment initiation service provider.
The banks subsequently went about exploring “alternative” options or
business models to bring it to market without having to go through the
onerous authorisation process with the Central Bank.
Irish Times
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