Irish banks’ money transfer plan attracts deeper competition scrutiny

CCPC to open full investigation into Synch Payments

The Synch project hit a stumbling block in January after the CCPC pushed back the banks’ application to establish a joint venture. Image: iStock

The Synch project hit a stumbling block in January after the CCPC pushed back the banks’ application to establish a joint venture. Image: iStock

 

The Competition and Consumer Protection Commission (CCPC) has decided to carry out a full phase-two investigation into a plan by the main Irish banks to set up a mobile money-transfer system, called Synch Payments, to take on the likes of Revolut and N26.

“Following an extended preliminary investigation, the CCPC has determined that a full investigation is required in order to establish if the proposed transaction could lead to a substantial lessening of competition in the State,” the authority said late on Wednesday afternoon.

The CCPC received a number of third-party submissions during the Phase 1 investigation and has invited others who would like to make a comment to do so by close of business on January 5th.

The shareholders in the company behind the plan include AIB, Bank of Ireland, Permanent TSB and KBC Bank Ireland, even though the latter is in the process of exiting the market and aims to sell most of its loans to Bank of Ireland.

The Synch project hit a stumbling block in January after the CCPC 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.

Further information

The watchdog said in early April that it had been re-notified by the lenders of the plan. It subsequently followed up with requests for further information.

The joint venture aims to deliver a payment app that will enable users to send and make payments in real time, one that will take on challenger banks such as Revolut, Zumo and Germany’s N26. The initial phase is expected to focus on consumer-to-consumer payments.

The fear among traditional banks is that, as these new platforms continue to build up market share in payments, they will ultimately have a ready customer base for future lending and other financial products.

The Irish banks have selected Italian fintech giant Sia to provide the technology for the planned system.