A payments app developed by Ireland’s high street banks to compete with digital banks has hit a snag after it was announced that the Competition and Consumer Protection Commission (CCPC) would launch an investigation.
The money-transfer app, called Yippay, was developed by a joint venture, Synch Payments, set up by AIB, Bank of Ireland, KBC Ireland and Permanent TSB.
More than €5.9 million has been raised to fund the project, according to a filing with Companies Registration Office made in late November.
The original submission to the CCPC was rejected in January for a lack of detail
A second application was made to the CCPC in April with a launch scheduled for early 2022 pending regulatory approval.
However, the launch may well be put back following the decision to investigate the competitiveness of the project.
“Following an extended preliminary investigation, the CCPC has determined that a full investigation is required in order to establish if the proposed transaction could lead to a substantial lessening of competition in the State,” stated the authority.
The CCPC had called for submissions from other market participants including the online payment providers such as Revolut, Stripe and N26 that the Synch Payments was aiming to rival.
Not only are the high street banks concerned about losing market share in the payments market, they are also fearful of fintechs building up a client base from where they can start to offer a wider range of banking services.
Unsurprisingly, the plan was opposed by the Electronic Money Association, a lobby group which represents the likes of Stripe, PayPal, Facebook and Revolut.
Revolut has seen its user base rise to more than a million this year, although the UK-based fintech has reportedly abandoned plans to set up a European wealth management hub in Dublin.
According to the Irish Times, Revolut has instead secured a MiFID licence from Lithuania, where it also has a banking licence.
In the meantime, Revolut will continue to seek authorisation as an e-money institution in Ireland.