In a strategic move to capture a share of the growing mobile banking market, Ireland's three main banks are preparing to launch Zippay, a new instant payments service. AIB, Bank of Ireland, and Permanent TSB (PTSB) are expected to roll out the service early next year, two years after a previous attempt was shelved due to regulatory challenges.
"Eligible customers will automatically be enrolled to Zippay, which will appear in their personal banking app once the service is launched next year," said Brian Hayes, chief executive of Banking & Payments Federation Ireland (BPFI). This innovative service enables users to send, request, and split payments effortlessly using just mobile numbers from their contacts.
The introduction of Zippay is designed to allow customers to send up to €1,000 per day, along with using the app to request transactions up to €500 at a time. By integrating Zippay into the banks' existing mobile applications, the institutions aim to circumvent the regulatory hurdles that plagued their earlier initiative, Synch Payments.
This instant payment capability has been a significant demand among banking customers, who often face delays of several days for traditional money transfers. Existing digital banking platforms, such as Revolut and N26, have tapped into this demand, attracting millions of users in Ireland due to their efficient service offerings.
"It will use mobile numbers saved in the customer’s contact list to identify who else uses Zippay. There will be no need to set up a new payee or know their IBAN, BIC or account numbers; the money will transfer between accounts seamlessly," Hayes elaborated.
The journey towards Zippay's launch has not been without its challenges. In 2020, the three main banks partnered with KBC to develop Synch Payments, an ambitious project that ultimately faced considerable setbacks. Initial concerns regarding the market power held by the three banks, compounded by the exit of competitors like KBC and Ulster Bank from the Irish market, raised significant scrutiny.
The project faced a major roadblock when the Competition and Consumer Protection Commission rejected its first application due to insufficient information. Although this hurdle was eventually cleared in June 2022, further delays followed, and Synch Payments was officially abandoned in 2023 after an investment of €17 million.
Now, the Zippay initiative appears more streamlined, as it builds on Nexi's existing operational framework in Italy, which already supports a similar payments system. Renato Martini, the digital banking solutions director for Nexi, emphasized that Zippay aims to be as accessible to customers across Ireland as possible. "After the initial launch, Zippay will be offered on a non-discriminatory basis to all financial institutions," Martini stated, highlighting the service's intent to foster competition in the market.
With the digital banking landscape continuing its rapid evolution, Zippay represents a critical response from traditional banks to the growing dominance of fintech competitors. As the launch date approaches, stakeholders are watching closely to evaluate how well Zippay can establish itself in a market that is already heavily influenced by established digital banking services. The efficacy of Zippay may ultimately determine whether Irish banks can reclaim a significant share of the mobile payments market while enhancing customer satisfaction and trust in traditional banking systems.