Irish banks’ ‘Revolut rival’ faces competition investigation

9 Dec 2021

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The CCPC is launching a full investigation into Synch Payments to determine if it lessens competition in Ireland.

The launch of a proposed payments app by four major banks in Ireland has hit another stumbling block, with the country’s competition authority launching an in-depth investigation into the joint venture.

In January, AIB, Bank of Ireland, Permanent TSB and KBC Ireland alerted the Competition and Consumer Protection Commission (CCPC) of their intention to create a digital payments service to compete with the likes of Revolut (which has more than 1m Irish customers) and N26.

Following a preliminary assessment, the CCPC said that it found the notification to be invalid because it was unable to gauge the scope of the Irish banks’ plans.

It started a phase-one investigation into the deal earlier this year, putting launch plans on hold, and now the competition body has said it is launching a full probe.

“Following an extended preliminary investigation, the CCPC has determined that a full investigation is required in order to establish if the proposed transaction could lead to a substantial lessening of competition in the State,” the CCPC wrote in a statement yesterday (8 December).

The CCPC, which vets mergers and acquisitions for anti-competitive concerns, said that it is accepting submissions from third parties regarding the venture until 5 January 2022.

According to RTÉ, the proposed service had been in the works for around two years prior to the notification to the CCPC in January. A new company called Synch Payments was set up to oversee the joint venture, developing an app reportedly called Yippay.

Last month, the Irish Times reported that Synch Payments had secured an additional €5m to fund the venture, led by AIB and Bank of Ireland buying up more than €4m in shares. Permanent TSB bought €855,000 in stock while KBC, which will soon exit the Irish market, bought only €8,500.

This was on top of an initial capital raise of €5.9m that was reported earlier in the year.

Growing digital banks such as the UK’s Revolut and Berlin-based N26 pose a significant threat to the market share of traditional banks because of their easy-to-use smartphone applications and popularity with younger users. Earlier today (9 December), UK neobank Monzo was valued at $4.5bn after a fresh funding round that saw the company raise $500m.

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Vish Gain is a journalist with Silicon Republic