A plan by Irish retail banks to launch a money-transfer app to rival Revolut and N26 has hit another hurdle as the Central Bank of Ireland has now informed them that the service must be authorised by the regulator.
Synch Payments, the company behind the banks’ joint venture, said that it will be next year before the service is launched.
Sources had said last summer, after the Competition and Consumer Protection Commission (CCPC) approved the project, that the app was set for launch as soon as the fourth quarter of last year. However, the project has been subject to drift since then, before it emerged that the Central Bank required it to be authorised.
“Synch Payments today confirmed that it has been informed by the Central Bank of Ireland of its decision that regulatory approval pursuant to the European Union Payments Services Regulation 2018 is required prior to market entry,” the company said in a statement on Thursday.
Romantasy, QuitTok and other words from a dystopia-coded year
Have Ireland’s data centre builders shot themselves in the foot through their own greed?
The old order of globalisation may be collapsing – and bringing Germany with it
Wonderwallets: the cost of everything in 2024, from Oasis tickets to Leinster House bike shelter
“Synch has been engaged with the Central Bank of Ireland for some time to ascertain whether authorisation would be required and welcomes the certainty that the decision brings.”
Synch intends to submit an application to the Central Bank for authorisation as an account information services provider (AISP) and as a payment initiation service provider (PISP) “as soon as possible, with a view to Synch entering the market next year”, it said.
The Irish economy has grown rapidly in recent years, how long can it continue?
A spokeswoman for Synch said the company’s current shareholders – AIB, Bank of Ireland and Permanent TSB – “are committed to bringing the app to market”.
“While this additional regulatory requirement pushes out the planned market launch, once approval is in place, it will provide the additional assurance that is increasingly demanded by consumers and retailers of payment providers,” Synch said.
[ Irish banks’ Revolut rival app to be run on Italian technologyOpens in new window ]
It first emerged in January 2021 that the country’s main banks were planning to set up an instantaneous money-transfer mobile app. The move underscored at the time how Irish lenders were behind the curve in having the technology in place to join the Single European Payment Area (Sepa) instant payment system.
The European Commission and European Central Bank (ECB) are currently pushing for the wider adoption across the euro zone of Sepa Instant, which currently only accounts for about 14 per cent of all conventional Sepa transfers.
Meanwhile, a decision due to be taken by the ECB on whether to give the green light to a digital euro would also overhaul the payments landscape.
[ Irish banks’ rival to Revolut approved by competition regulator with conditionsOpens in new window ]
The success of Synch, therefore, would ultimately come down to what other functions the app will be able to provide, according to industry observers.
In order for the CCPC to approve the project last year, Synch set out what it called “objective eligibility criteria” for any banks or other financial institutions that wished to become participants in the service, with defined timelines for processing new applications. The watchdog also stipulated that Synch has a corporate governance structure, including independent board members, to allow it “to operate with a greater level of independence from its founding shareholders”.
