Banks behind Synch payments app looking at ways to avoid Central Bank authorisation process

Synch is backed by AIB, Bank of Ireland and Permanent TSB and was being designed as a mobile payments app to rival Revolut

The banks behind the Synch mobile payments app, which is designed to rival Revolut, have said they are “exploring alternative” options or business models to bring the project to market in order to avoid having to go through Central Bank of Ireland authorisation.

Synch, whose shareholders are AIB, Bank of Ireland and Permanent TSB, said in July that it had been informed by the Central Bank that its existing business plan required authorisation as an account information service provider (AISP) and as a payment initiation service provider (PISP).

It is believed that the decision to explore different options was due to the onerous process that would be involved in securing Central Bank authorisation.

“Despite this fundamental change to the original business operating model, the directors consider the use of the going-concern basis of accounting in the preparation of the financial statements as being appropriate,” Synch said in its latest annual financial statements, filed with the Companies Registration Office on Tuesday.

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“The company continues to be reliant on funding from shareholders. The board is considering a number of options and has received letters of comfort from all three shareholders that they will continue to fund the company and it will be in a position to continue to meet its obligations as they fall due for the period of at least 12 months from signing the financial statements.”

Synch said that its board is currently considering the potential effects that any change will have on its current contractual arrangements and obligations, “particularly one major supplier of services, the financial impacts of which cannot be estimated given the current level of uncertainty”.

The “major supplier” is understood to refer to European paytech group Nexi, based in Milan, which was confirmed last year as the platform and service provider to help bring the Synch app to Irish customers and merchants.

It first emerged in January 2021 that the country’s main banks were planning to set up 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.

Sources had said last summer, after the Competition and Consumer Protection Commission (CCPC) approved the project, that the app was set for launch as early as the fourth quarter of last year. However, the project has been subject to drift since then, before it emerged that the Central Bank required it to be authorised.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times