Competition authorities have been alerted to the banks’ plans for a payments app to rival the fintech players.
Four of Ireland’s pillar banks are teaming up on a new digital payment system to take on fintech challengers such as Revolut and N26.
AIB, Bank of Ireland, Permanent TSB and KBC Ireland alerted the Competition and Consumer Protection Commission (CCPC) of its joint venture, which has been in the works for around two years according to RTÉ.
The project is a new app-based payment system that would allow customers of the four banks to easily send money to each other. It is hoped to replicate the ease and usability of the likes of Revolut, which has more than 1m users in the country.
A new company called Synch Payments has been incorporated by the banks. The Banking and Payments Federation Ireland industry group is also involved in the new project.
The app will reportedly be focused on consumer payments to start, with business payments possibly following.
Pillar banks like AIB and Bank of Ireland have come under increasing pressure in recent years by the entry of challenger banks and neobanks offering quick app-based payments.
Revolut and N26, two of the sector’s biggest players in Europe, have been active in Ireland for a number of years. Starling Bank, the start-up founded by former AIB executive Anne Boden, also has plans to launch here.
The threat has forced traditional banks to respond with similar products, but these developments have seen mixed results. NatWest’s digital bank Bó, which launched in the UK in 2019, shut down after just six months. Other banks have sought to partner with fintech start-ups rather than take them on.
Absent from the Irish plans is Ulster Bank, which is owned by NatWest and whose future in Ireland remains up in the air.
The next step for Synch Payments will see the CCPC begin a preliminary investigation into the joint venture to establish if it presents any anti-competitive concerns. The competition authority will seek comments from third parties between now and 22 January.