Rolling out mobile payments has become a top priority for Irish banks. Although that might not necessarily work out that way, they even put together a plan involving an in-house developed payments application. The ongoing competition with digital banks has been put on hold for now, as the CCPC wants to investigate this effort.
Irish Banks Hit A Snag
While it is commendable for Irish banks to put together their differences and collaborate on a new mobile payments opportunity, nothing ever goes smoothly in the financial industry. Collaboration can only go so far before some people tend to get a bit more inquisitive. High street banks across Ireland want to develop a payment application that competes with digital banks. A viable approach as mobile payments continue to gain popularity year over year.
The mobile payment application, dubbed Yippay, is developed by Synch Payments, a joint venture. Moreover, it is set up by AIB, Bank of Ireland, Permanent TSB, and KBC Ireland. These financial institutions are crucial players in Ireland’s financial ecosystem, yet it appears there is some unexpected attention. More specifically, the Competition and Consumer Protection Commission (CCPC) wants to investigate this new mobile payment app venture.
Interestingly, the development effort has attracted nearly 6 million euros in funding to date. That confirms there is a growing demand for such a solution in Ireland, even if the initial submission to the CCPC was rejected in January. The submission “lacked detail”, leaving much to imagination per the filing. A second application to the CCPC was neither rejected nor accepted, as regulatory approval still hangs in the balance.
Following the inquiry by the CCPC – mainly regarding the competitiveness of the mobile payments solution – the launch may not meet the initial deadline of April 2022. Although the CCPC conducted an extensive preliminary investigation, the group feels a much more detailed look is warranted at the time. That usually doesn’t bode well, as there are concerns over “whether proposed transactions lead to a substantial lessening of competition in the State”.
Other Players To Weigh In
While the CCPC continues its probe into this mobile payments application, other service providers are asked to share their opinion. Submissions from Revolut, Stripe, and N26 have been requested, as those are the main entities that Synch Payments would rival. It will be interesting to see how those comments influence the investigation and the findings that come out of it.
More competition is beneficial to Irish consumers. As high street banks worry over losing market shares, fintech providers can capitalize on the momentum to enhance their selection of products and services. The future of payments in Ireland may look very different from today in a few years from now, although nothing has been decided upon yet.