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.