Banks in Ireland have shot down their plans to launch an instant payments app to rival neo-banks like Revolut and N26.
AIB, Permanent TSB, Bank of Ireland, and the former KBC Ireland established Synch Payments in 2020 to launch the payment app. The initiative, however, has been marked by a series of delays and challenges.
This July, the Central Bank said the planned new service needed to be authorised by it.
The Irish banks have now decided to drop the app, which was to be called Yippay.
According to filings in the Companies Office, the shareholders have invested a total of €17 million in the planned service.
In a statement, Synch said that after carefully reviewing its business plan, the company decided it was no longer feasible to launch its payments app into the Irish market. Synch will thus cease operations, the statement also said.
“Synch was established in 2020 by some of Ireland’s leading banks with the intention of bringing a simple, industry-wide mobile instant payment service to the market for all payment types, based on an innovative digital solution,” the statement said.
“A combination of factors has contributed to an elongated timeframe to launch, which makes the original Synch proposition no longer viable,” it said.
In a statement, the Central Bank said: “An effective authorisations process is crucial to protect consumers within the financial system.”
“Any company offering this type of payments service requires appropriate authorisation and in this case, Synch was engaging with us but had not started the application process. We stand ready to promptly engage with all firms seeking to be authorised in Ireland,” the Central Bank’s statement also said.
The introduction of the banks’ instant payment app was perceived as a strategy to impede the swift expansion of Revolut within this market. The neo-bank currently boasts approximately two million customers in this market.
Revolut has recently implemented Irish IBANs (International Bank Account Numbers), a move that has increased the attractiveness of its current account option among users in Ireland.
The decision to abandon the Yippay app by Synch comes even though the banks had obtained approval from the State’s competition watchdog to develop a money-transfer app, despite objections raised by competitors like PayPal and Revolut, among others.
The Banking and Payments Federation Ireland was coordinating the new app plans.
An Italian firm, FinTech, had been chosen to supply the technology for the service. Synch aimed to introduce a payment app enabling users who sign up to send and receive payments in real-time. It was an attempt to compete with challenger banks like Revolut, Zumo, Bunq, and Germany’s N26.
Local retail banks are concerned that the ongoing growth of challenger banks in the payments sector may lead to the creation of a readily available customer base for future lending and other financial products.
