Irish Central Bank demands payments innovation…after shutting down Synch

The Irish Central Bank has published its National Payments Strategy, and amongst other initiatives such as the protection of cash, it has taken a swipe at home grown ambitions to be more progressive.

Irish Central Bank demands innovation

In an extraordinary speech at the BPFI’s National Payments Conference, Vasileios Madouros, deputy governor, Central Bank of Ireland said that, among other priorities, was the need for providers to ensure that Irish consumers and small businesses benefit from payment innovations that exist elsewhere in Europe.

Madouros highlighted that since the last National Payments Plan published by the Department of Finance more than a decade ago, “there has been remarkable change and innovation in domestic payments”.

These include a move towards contactless card payments and mobile wallet payments, as well as digital banks entering the Irish market offering fast mobile payments solutions.

However, he said Ireland’s payments landscape is still “lagging behind” other countries, noting that despite the instant payments infrastructure being available since 2017, material providers of payment accounts in Ireland have not implemented it.

For those of you who are long term readers of Payments Cards & mobile you will acknowledge why this is so extraordinary.

In January 2021 four of Irelands largest banks joined forces to launch a mobile 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.

Later that month, the proposed venture 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.

In July 2023 there were further problems that beset the instant payments based app, after the JV behind the initiative was told it needed clearance under EU rules.

“Synch Payments DAC, the Irish instant mobile account to account payments service, today announced that following a careful and considered review of its business plan, it has reached the difficult decision that it is no longer feasible to launch its payments app, Yippay, into the Irish market and Synch will cease operations,” said a spokeswoman for Synch at the time.

“A combination of factors has contributed to an elongated time frame to launch which makes the original Synch proposition no longer viable.”

The combination of factors is clear – an underprepared domestic regulator which was unable to support the initiative it is now calling on banks to provide, and further regulatory oversight from the EU regulator who is desperate to push its flagging instant payments initiative, EPI, and clearly want to avoid a fractured marketplace.

I am all for bank bashing when they have actually done something wrong, but in this instance they have not only done nothing wrong but are being now being attacked for trying to provide the service that the regulator is now calling for!

“Despite the instant-payments infrastructure being available since 2017, material providers of payment accounts in Ireland have not implemented it. For consumers and businesses, this is an unsatisfactory outcome,” Madouros told the conference of people with very short memories.