In mid-January 2021 the four of Irelands largest banks joined forces to launch an instant payments digital payment app, dubbed Synch, that they intended to promote to help fend off the threat posed by new payments platforms, such as Revolut and other Neo banks.
A week later, Synch hit a regulatory block, as the Competition and Consumer Protection Commission (CCPC) pushed back their application to set up a joint venture because they did not provide enough information.
“Following a preliminary review of the notification, the CCPC has formed the view that the notifying parties have not provided full details of the proposed transaction as required,” the CCPC said in a statement.
Now the banks have been cleared by the State’s competition watchdog to set up Synch payment, which is aimed at allowing instant person-to-person payments on mobile phones. It is understood the payment app will be called Yippay.
AIB, Bank of Ireland, Permanent TSB and KBC Bank Ireland created Synch Payments – KBC Bank is a shareholder in the venture, but its plans to leave the market could see its shareholding replaced by An Post. The credit unions are also likely to become part of the new system.
CCPC clearance for the deal is controversial as the main banks are already dominant in this market. Objections to the banking joint venture were lodged by the likes of PayPal and Revolut.
Conditions have been attached to the CCPC approving the deal. These include an instance that competitors like An Post and credit unions have to have access to it.
The CCPC said that in response to preliminary competition concerns it had got binding commitments from the banks that form Synch.
These involve Synch setting out objective eligibility criteria for any banks or other financial institutions that wish to become participants in the Synch mobile payments service.
In addition, the parties have agreed to put in place: a governance structure including independent board members, which will allow Synch to operate with a greater level of independence from the founding shareholders.
Finally, Synch and the founding shareholders will be required to report to the CCPC on their compliance with the commitments on an annual basis.
The new app is being co-ordinated by the Banking and Payments Federation Ireland. Italian firm FinTech has been selected to provide the technology behind the service.
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