The four Irish banks seeking to set up a money-transfer app to rival Revolut have raised an additional €5 million to fund the venture.
Documents filed on Friday with the Companies Registration Office show that AIB, Bank of Ireland, Permanent TSB and KBC Bank Ireland committed more capital to the new entity, Synch Payments.
AIB acquired a further €2.3 million of shares while Bank of Ireland bought €1.7 million. Permanent TSB bought €855,000 of stock while KBC Bank Ireland, which is exiting the Irish market, took on an additional €8,500.
This comes on the back of an initial capital raise of €5.9 million flagged earlier this year.
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 Synch project hit a stumbling block earlier this year after the Competition and Consumer Protection Commission pushed back its application to establish a joint venture.
The commission said it was unable to determine whether the planned transaction was a merger or acquisition within the meaning of Irish competition laws.
The venture is still awaiting the green light from the competition authority but expects to be launching next year.
“Synch Payments was established by some of Ireland’s leading banks with the aim of transforming digital payments from – and to – consumers and businesses in Ireland through the introduction of a new payments application,” a Synch spokeswoman said. “While the banks remain the shareholders of Synch, it has been established as an independent entity with its own executive management team. It is currently awaiting CCPC approval,” she said.
“The recent filings in the Companies Registration Office relate to a scheduled share allocation among our existing shareholders. The additional investment will be used to support both the launch of the business and its early growth plans,” she said.
“We welcome and acknowledge the continued commitment and support of our shareholders as we prepare to bring the benefits of Synch to the market next year,” she added.