# Irish banks working on a payments app to compete with Revolut



## Brendan Burgess (11 Jan 2021)

According to Charlie Weston in today's Indo 








						Banks come together to develop payment app to rival Revolut
					

FOUR banks have come together to develop a new payment system that they hope will rival Revolut.




					www.independent.ie
				




_FOUR banks have come together to develop a new payment system that they hope will rival Revolut.

The move by AIB, Bank of Ireland, Permanent TSB and KBC Bank represents the first joint venture between the main banks here in more than 20 years.

The joint venture has had to be notified to the Competition and Consumer Protection Commission in case it infringes competition law._

They are coming together to build an an app-based instant payment system in a bid to stem the rapid loss of customers to digital disruptors such as Revolut and Apple Pay.


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## MrEarl (11 Jan 2021)

Hello,

What's your view on this please, Mr. Burgess?

Personally, I find it very disappointing that they are apparently over 2 years working on the concept, and still haven't delivered it.

That said, I also look at the limited IT investment by Irish Banks over the last decade, or more, and think - this will never happen, or if it does, it'll probably prove to be unstable and quickly become outdated.

What benefit will it bring to Irish consumers?

- instant transfers?  People are happy with Revolut, PayPal etc. What's the incentive to change (unless perhaps, where there's concern about using non - banks).?

- cheaper foreign currency exchange rates? Will they really compete with Revolut and if so, will it be worthwhile?

- retaining cash, for liquidity?  Banks & Credit Unions are awash with cash, and it's costing them money. Why try and get cash it back into the Banks?

- where does that leave each of the Banks existing apps?


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## NoRegretsCoyote (11 Jan 2021)

Didn't AIB try this in 2014?



> AIB LAUNCHES ‘ME2U’ APP – AN EASY WAY OF SENDING MONEY BETWEEN PHONES
> AIB customers can now send money securely by smartphone to their friends, family and anyone with a mobile phone number, whether the recipient banks with AIB or not as long as they have a euro personal Visa card



I never knew anyone who used it.


Today's annoucement sounds a bit like Payconiq which is very popular in the Benelux I believe. It's more likely to gain traction with all banks behind it I would think.


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## Brendan Burgess (11 Jan 2021)

The BPFI issued a statement on the matter 

“The four banks have launched Synch Payment DAC , the aim of which is to deliver a multi-banking payment app that will enable Irish users to send and make payments in real time. This is now a matter for the CCPC and we await their determination on the application that was made last week.”


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## Brendan Burgess (11 Jan 2021)

The big advantage would presumably be that it will be backed by a banking license. So that if it goes bust, the customers will be covered.

I wouldn't have more than €200 in my Revolut card at any time.

It's hard to see them matching Revolut's technology though. 

If the card is as good as Revolut's and I can use by AIB debit card as a Synch Card, then I would probably use it. 

But we have to wait and see.

Brendan


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## NoRegretsCoyote (11 Jan 2021)

Brendan Burgess said:


> The big advantage would presumably be that it will be backed by a banking license. So that if it goes bust, the customers will be covered.



But isn't it an instant payment system that they are talking about? Such payments are cleared (I presume) pretty rapidly so the risk of bank failure isn't all that material. 

Revolut is a bit different as it acts like an electronic purse and customers can maintain large balances for long periods.


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## Brendan Burgess (11 Jan 2021)

Not sure what they are proposing.  But it would be safer than Revolut I think. 

Brendan


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## tomdublin (12 Jan 2021)

It seems that this won't mean offering current accounts with fewer charges, just adding instant transfer functionality to existing accounts.  That's going to make Irish banks only marginally more competitive with Revolut & Co. Not sure why they have supposedly been spending the past two years "developing" a technology that already exists.


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## Brendan Burgess (12 Jan 2021)

tomdublin said:


> Not sure why they have supposedly been spending the past two years "developing" a technology that already exists.



I would guess that they had to agree on protocols which would mean that 5 different systems would work together?

Ulster bank has not joined. That could be due to how far behind their technology is or it could be because they might not be around.

Brendan


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## NoRegretsCoyote (12 Jan 2021)

Brendan Burgess said:


> I would guess that they had to agree on protocols which would mean that 5 different systems would work together?


I suspect for competition reasons  they will have to make the technology accessible to competitors setting up something similar.

This could make it more of a technical challenge to set up.


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## MugsGame (12 Jan 2021)

It sounds like the mobile app is an on-ramp to existing SEPA Instant European infrastructure, and won't necessarily be limited to paying Irish banks, or to banks using the app.



> Irish retail banks are, in the first instance, aiming to realise their ambition of launching a mobile payment solution (Project Pegasus – a collaboration project, led by BPFI) by Q1, 2021. This account-to-account mobile-based solution will be built on the SEPA infrastructure (payments will be routed via the current STEP2 SCT rails). The solution will be compatible with SEPA Instant rails (SCTinst). Ireland is one of the few countries in Europe that does not currently offer an instant payments solution to its customers. Project Pegasus will address this need and will be capable of integration into any European scheme that may emerge. In its capacity as catalyst, the Central Bank actively encourages the Irish retail banks to make instant payments available to its customers in a timely manner and continues to monitor Project Pegasus and related developments.



I suspect based on the above that this won't involve any new cards or bank accounts for the user, which is one big advantage over Revolut.

Also, perhaps we're only hearing about it in the media now because it's close to launch.


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## MrEarl (12 Jan 2021)

Brendan Burgess said:


> Ulster bank has not joined. That could be due to how far behind their technology is or it could be because they might not be around.
> 
> Brendan



Or perhaps they considered it a waste of money, given what's in the market, and perhaps NatWest's own plans, at group level?

When I thought about Irish banks that are only subsidiaries of international banks, I also found myself wondering why KBC would commit resources to this, and what their group strategy might be?

I really don't see any great attraction to it, tbh. SEPA have a service, which none of the Irish Banks have adopted to date, while Revolut have over a million Irish customers, so it's a bit late to be trying to defend against them.

Will this simply be Ireland's next Laser Card (a poor expensive cousin of the debit card schemes that were launched in other countries, around the same time) ?


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## Lightning (12 Jan 2021)

What are Irish banks trying to do here? 

Compete with Revolut? or simply offer instant payments? or both? 

Competing with Revolut/N26/Monese? Good luck ...
- Can't see Irish banks offering fee-free FX. 
- Can't see Irish banks offering USD, GBP and EUR (largely) current accounts free of charge. 
- Can't see Irish banks offering a quick and easy platform for share investments and crypto investments. 
- Can't see Irish banks offering an app that is easy to use as Revolut. 
- Can't see Irish banks offering the scale and global reach that Revolut offers. 
- N26 has a banking license and it is likely that Revolut will have a full banking license soon. 

Offering instant payments? 
- Why do the Irish banks have to go to such a big song and dance via this new company to offer instant payments? Surely they should simply support SEPA Instant on a bank by bank basis like what happens in other countries. 

This all seems to me to be too little too late. Instant payments and better functionality arrived in Ireland 4 years ago. 

On Twitter I saw someone compare this to prior attempts by mobile companies to complete with WhatsApp which were doomed to fail. Good analogy.


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## NoRegretsCoyote (12 Jan 2021)

CiaranT said:


> or simply offer instant payments?



It looks like just this.

Not clear whether this would be a different, or integrated within banks' own apps.


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## tallpaul (12 Jan 2021)

SEPA Intant:


Implement this properly.

There I've just saved the banks several million euro without having to bring out an app that will be old before the first download. You are welcome banks!!


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## Lightning (12 Jan 2021)

If this proposal is simply a dressed up version of SEPA Instant ... then what is the need for creating an additional app (as they seem to be doing), organisations (new company) and all this added complexity. Seems mad. 

Irish banks - Simply support SEPA Instant inside your own infrastructure/apps and start to make your own apps more feature rich. No need for this separate organisation.


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## MrEarl (12 Jan 2021)

From what I've read, the payment system will initially only be for personal banking customers, but may later be expanded to include business customers.

The above limitation, added to the fact that this new service will only facilitate banks within Ireland, and in euros (unlike SEPA), only adds to the negatives surrounding this proposal.

If anything, I see this proposal as delaying the potential for cross boarder instant Bank payments, by a further decade.


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## tomdublin (12 Jan 2021)

It seems it's more for PR purposes, allowing Irish banks to claim that they are technologically innovating.


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## Gordon Gekko (12 Jan 2021)

It sounds like the wrong product.

i.e. that they’re squaring the circle of interbank transfers being next day versus, say, BOI to BOI being instant.

That’s good, but shouldn’t affect something like Revolut.

One of the many advantages of Revolut is that you can send money with a phone number and with minimal hassle logging in etc.


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## shweeney (12 Jan 2021)

classic Irish banking response, spend 2 years and a load of money to come up with an inferior product.


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## paulgreen (12 Jan 2021)

I currently have an N26 Account,Revolut (stg) and Transferwise all have great apps and I have cards for all 
Now we all know the the Irish Banks won't be anything like these 3 as there only interest is ripping the public off, lets face it they have been doing that for years its in there make up unless they offer free cash then they can go whistle.
I have always said they would rather slit there wrists than give you something for nothing!


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## Gordon Gekko (12 Jan 2021)

paulgreen said:


> Now we all know the the Irish Banks won't be anything like these 3 as there only interest is ripping the public off, lets face it they have been doing that for years its in there make up unless they offer free cash then they can go whistle.
> I have always said they would rather slit there wrists than give you something for nothing!



At least you’re open-minded about it...


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## Peanuts20 (12 Jan 2021)

I do find it astonishing that some people seem to think it is a prudent thing to do to have large sums saved with a loss making online "money manager" app which lacks the cover that a licensed bank can give.  

When I look at my own banking requirements and needs, as an ordinary "Joe Soap" and the costs of my banking in terms of fees and charges against what I would pay on Revolut, the saving to me would work out at around €0.80 per week. Not worth the risk in my mind.


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## shweeney (12 Jan 2021)

Peanuts20 said:


> I do find it astonishing that some people seem to think it is a prudent thing to do to have large sums saved with a loss making online "money manager" app which lacks the cover that a licensed bank can give.
> 
> When I look at my own banking requirements and needs, as an ordinary "Joe Soap" and the costs of my banking in terms of fees and charges against what I would pay on Revolut, the saving to me would work out at around €0.80 per week. Not worth the risk in my mind.



who has large sums of money with Revolut?


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## NoRegretsCoyote (12 Jan 2021)

shweeney said:


> who has large sums of money with Revolut?


Losing even a €100 balance on Revolut would be a big deal for tens of thousands of Irish users.


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## Peanuts20 (13 Jan 2021)

shweeney said:


> who has large sums of money with Revolut?



Average value in the UK in a Revolut account is £305, approx €340. As that is the average, it would suggest some people have larger amounts in it. 

This is seperate from those held in Revolut savings vaults which really shows the weakness of Revolut since those are no more then savings accounts held at a licenced bank which Revolut cream some interest off which is not paid to the account holder.


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## tomdublin (13 Jan 2021)

Peanuts20 said:


> This is seperate from those held in Revolut savings vaults


No, the savings vaults are not separate accounts.  All your money is held in a single account.  They are just a visual tools helping account holders to organise their money.


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## Peanuts20 (13 Jan 2021)

tomdublin said:


> No, the savings vaults are not separate accounts.  All your money is held in a single account.  They are just a visual tools helping account holders to organise their money.



On valuts,  Revolut send your money to a high street bank and they hold the money in a seperate account. (the trustee) Your vault and the Revolut app is aggregating all of this together


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## tomdublin (13 Jan 2021)

All their deposits are held in a segregated client account with a bank.  "Vaults" have nothing to do with this.  If you create a "vault" and transfer money into it from your Revolut account the money doesn't leave  your account.  It's a bit like creating subfolders on your computer. The files stay in the same place but they become easier to visualise.


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## nest egg (13 Jan 2021)

An app, from a group of Irish banks, to rival Revolut? I had to check my phone to make sure it wasn't April fools' day.

As usual, our banks are looking to sow up the market for their own ends, they're "solving" a problem which doesn't even exist (see: SEPA Instant Credit Transfer). This looks a lot like the latest incarnation of the Laser card!


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## MugsGame (13 Jan 2021)

I had the same initial reaction to this news, until I did some research (see my post earlier in thread).

Pegasus is the Irish banks way of rolling out access to SEPA Instant. "Like Revolut" seems to be their way of explaining it to the media.

I don't expect it to be perfect, but I'm happy to wait and see.

Coming together in this way also allows them to support some of the 


> A  scheme participant must have an agreement with other individual  scheme participants or with communities of  scheme participants (for example, at the level of a country) before it can support any  option.


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## nest egg (13 Jan 2021)

I was just listening to the IT's Inside Business podcast and apparently the banks haven't upgraded their systems to comply with SEPA Instant, so this looks like a cheap fix.


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## arbitron (14 Jan 2021)

mojoask said:


> I was just listening to the IT's Inside Business podcast and apparently the banks haven't upgraded their systems to comply with SEPA Instant, so this looks like a cheap fix.



Just listened to the same podcast and could not believe it. They mentioned the new BofI app which the bank spent a lot of money on and it is still very poor. I tried to use it on a tablet recently and it was impossible. KBC and AIB are better but they are all struggling to offer a clean and attractive user experience/interface which the new fintech firms are excelling at.


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## Ordinary User (16 Jan 2021)

tbh having experience of using online banking, dedicated apps etc in other countries, the stage of technical development of Irish banks, what they offer, how it operates and what can you do within your bank account is simply shocking. I don't think they can actually deliver something that could compete with Revolut.


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## Gordon Gekko (16 Jun 2022)

I hope they got the money up front from KBC…


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## Brendan Burgess (17 Jun 2022)

This has now been approved by the CCPC 






						Irish banks to launch payment app. to compete with Revolut
					

The new app cleared the CCPC today - https://www.rte.ie/news/business/2022/0616/1305296-banks-plan-for-new-mobile-payments-system-clears-ccpc/  I still don't under why they are doing this. SEPA instant anyone?



					www.askaboutmoney.com


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