The latest battleground between the three domestic banks and Revolut has opened up with the launch of Zippay, an instant mobile payments system that AIB, Bank of Ireland and PTSB are launching this week to rival the London-based neobank.
Zippay will be rolled out on a phased basis from Tuesday, with the potential to reach more than five million eligible customer accounts of the three retail banks, according to the Banking and Payments Federation Ireland (BPFI), which is co-ordinating the project.
No doubt it will win business but it remains to be seen if the banks will displace Revolut in the lives of the digital bank’s more than 3 million users here.
The domestic banks are arguably too late to the party, with Zippay taking years to get off the ground (partly due to dealing with competition issues). Revolut has a huge head start in instant payments, particularly among those under the age of 25 who have grown up with the payments app and have no particular loyalty to the established banks.
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In addition to instant payments and cheap foreign currency, Revolut has expanded its offering in recent years, adding savings products and a trading system for buying shares and crypto.
Yet the real turf war will be fought over mortgages and current accounts. For the past year, Revolut has been teasing customers here about the launch of mortgages, running a pilot among family and friends of staff.
Between them, AIB, Bank of Ireland and PTSB have a 90 per cent share of this lucrative market (roughly AIB 30 per cent, Bank of Ireland 40 per cent and PTSB 20 per cent), and various spin-offs such as house insurance and life products.
Will Revolut’s customers here trust it enough to have their wages paid into its accounts and to borrow hundreds of thousands of euro over long terms?
[ Can the ‘Irish Revolut’ Zippay beat the original at its own game?Opens in new window ]
Revolut has no track record in mortgages and there is a growing number of stories of poor customer support when issues arise, including accounts being hacked.
Then again, the banks hardly covered themselves in glory when dealing with mortgage arrears customers post the 2008 crash.
So the jury remains out for now. In the end, it will probably come down to pricing. Get that right and Revolut will inevitably win market share on mortgages – and possibly the long-term trading war with the banks.
