Irish banks club together with new digital service to counter Revolut threat

Four of the biggest banks operating in the Irish market are joining forces to launch an instantaneous digital payments app that they hope will help them fend off the threat posed by new payments platforms, such as Revolut.

AIB, Bank of Ireland, Permanent TSB and the Irish arm of Belgian bank KBC have come together to set up Synch Payments, a joint venture company to oversee the project. Ulster Bank, whose future in the Irish market has been cast into doubt recently, is not involved in the project.

Synch this week provided notification of the venture to the Competition and Consumer Protection Commission (CCPC), which has launched a preliminary investigation into the plan under competition rules.

Payments app

The Banking & Payments Federation Ireland, the main industry group for the financial services sector, confirmed that Synch was connected to the planned launch of a “multi-banking payment app that will enable Irish users to send and make payments in real time”.

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“This is now a matter for the CCPC and we await their determination on the application,” the BPFI said.

Synch was established in September, according to records in the Companies Registration Office. It is unclear from the filings so far whether the banks have an equal stake in the venture, or whether shareholdings are allocated on a pro-rata basis according to the banks' market size.

The joint venture's directors include Ann Smith, who is director of corporate services at BPFI, and Inez Cooper, a specialist in the cards and payments sector. Ms Cooper previously worked on projects for PTSB and Bank of Ireland, and was also head of strategy for AvantCard, before setting up a consultancy in 2017.

Traditional banks are facing a threat to their card and payments operations from challenger platforms, such as UK fintech operator, Revolut, N26 and Monzo. Revolut, the UK-headquartered main digital platform in the Irish market, was only established in 2015 and claims to have already picked up about 1.2 million Irish users since its launch here in 2019.

Revolut has since branched into several functions traditionally satisfied by day-to-day banking, such as contactless, chip and pin and virtual card transactions, peer-to-peer money transfers, and transactions conducted via the SEPA banking system. It claims its fees are lower than traditional banks.

Revolut has established itself in the Irish market by gaining the attention of the Department of Finance, which has repeatedly used its users' detailed spending data in economic trend reports.

Mainstream banks in several other European countries are planning digital payments apps to counter the challenge posed by the new platforms. For example, Credit Suisse last September announced it would launch its CSX app