Irish banks select Italian fintech Sia to develop app to rival Revolut

The group of Irish banks seeking to set up an instantaneous money-transfer mobile app to take on the likes of Revolut and N26 have selected Italian fintech giant Sia to provide the technology, according to sources.

Sia, which is backed by Italian state-owned investment firm Cassa Depositi e Prestiti (CDP) and is currently in the process of merging with fellow Milan payments giant Nexi, is yet to sign final contracts, as the entire plan is dependent on approval by the Competition and Consumer Protection Commission (CCPC), they said.

It emerged on Monday that the CCPC had received notification of the proposed payments app joint venture between AIB, Bank of Ireland, Permanent TSB and KBC Bank Ireland, called Synch Payments.

Ulster Bank, which is not a founding member but was known to have been involved in initial discussions about the plan, "hope[s] to join the scheme at a later date", a spokeswoman for the lender said.

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Industry sources said that Ulster Bank's decision not to be involved at this stage is separate to the fact that its parent, NatWest, is currently reviewing the future of the Irish unit.

‘Positive’ response

Synch Payments would also be open to other domestic account providers such as An Post, the credit unions and fintech companies. A spokeswoman for the Banking and Payments Federation Ireland (BPFI), which has been co-ordinating the proposal, said that those working on the plan have received a "very, very positive" response from potential members in recent days.

It would mark the first major collaboration between banks since the Laser debit card was introduced in 1996. Laser cards were phased out between 2007 and 2014 as banks replaced them with Visa or Mastercard debit cards.

"If the banks show a willingness to share a platform on digital payments, it raises the questions as to whether there are other projects/ventures that could be considered as they all look to reduce costs/digitalise as low rates and competition continue to pressure revenues," said Eamonn Hughes, a banking analyst with Goodbody Stockbrokers.

Traditional banks are facing a threat to their card and payments operations from challenger platforms, such as UK fintech operators Revolut and Monzo and Germany's N26. Revolut, the UK-headquartered main digital platform in the Irish market, was only established in 2015 and claims to have already picked up about 1.2 million Irish users since its launch here in 2019.

Revolut, N26 and Monzo have yet to report an annual profit. However, the fear among mainstream banks is that as so-called neobanks continue to build up market share in payments, they will ultimately have a ready customer base for future lending and other financial products.

The move by Irish banks to try and set up an instantaneous payments app underscores how the industry as a whole is behind the curve in having the technology in place to join the Single European Payment Area (Sepa) instant payment system.