Irish banks put €5.9m into app aimed at taking on Revolut, N26
Initial investment into Synch Payments made before Christmas
Traditional banks are facing a threat to their card and payments operations from challenger platforms, such as UK fintech operators Revolut and Monzo and Germany’s N26. Image: iStock
The group of Irish banks seeking to set up an instant money-transfer app to take on the likes of Revolut and N26 have committed almost €5.9 million of initial capital to the joint venture company behind the plan.
Documents filed in recent days with the Companies Registration Office show that AIB, Bank of Ireland, Permanent TSB and KBC Bank Ireland each bought shares in the company, called Synch Payments, just before Christmas.
The project is being co-ordinated by Banking & Payments Federation Ireland (BPFI) and Italian fintech giant Sia has been lined up to provide the technology.
However, the plan hit a stumbling block last week, as the Competition and Consumer Protection Commission (CCPC) pushed back the banks’ application for competition approval for the joint venture because they did not provide enough information.
The CCPC said it was unable to determine whether the planned transaction was a merger or acquisition within the meaning of Irish competition laws, but that it would engage with the lenders on next steps. A spokeswoman for the BPFI said Synch Payments is engaging with the CCPC.
Traditional banks are facing a threat to their card and payments operations from challenger platforms, such as UK fintech operators Revolut and Monzo and Germany’s N26. The fear among mainstream banks is that as so-called neobanks continue to build up market share in payments, they will ultimately have a ready customer base for future lending and other financial products.
AIB committed the most capital to Synch Payments in the initial equity raise, at €2.73 million, followed by €2.06 million of shares bought by Bank of Ireland. Permanent TSB bought just over €1 million of stock, and KBC Bank Ireland, €100,299.