A plan by the main retail banks for a new mobile based payments system to rival services such as Revolut has been given the green light by the Competition and Consumer Protection Commission (CCPC) subject to certain binding commitments being met.
The Synch platform is being established through a joint venture by AIB, Bank of Ireland, Permanent TSB and KBC Bank Ireland and will allow instant person-to-person payments.
It will also facilitate instant person-to-business payments for online shopping through websites, or in store through the use of QR codes.
First proposed two years ago, Synch will be available to customers of banks and other financial institutions participating in the project, including the founding banks and others who choose to join later.
The CCPC said its initial preliminary investigation had concluded a full probe was required to establish if it could lead to competition being reduced.
That phase two enquiry identified some concerns, the CCPC said, including that given the founding shareholders have a large combined share of the market, Synch could be used to block potential new competitors from entering it.
It was also concerned that the establishment of Synch could lead to the stifling of innovation in mobile payments services, "either through the ability of the founding shareholders to influence decisions regarding future innovation within Synch itself or through a reduced incentive to develop other services."
As a result, the CCPC said the parties have proposed making binding commitments to the CCPC, including that they have set out objective eligibility criteria for any banks or other financial institutions that wish to become participants.
"Synch has also set out defined timelines for processing new applications by prospective licensees," the CCPC said.
"Synch will in due course also allow for interoperability by providing access to a software development kit (SDK) component which will allow licensees to embed certain mobile payments functionalities within their own apps."
The board of Synch will also include independent members to allow it to operate with a greater degree of independence.
While "substantial safeguards to prevent the exchange or disclosure of commercially sensitive information" have also been put in place.
Those involved in Synch will have to file a compliance report with the CCPC every year.
"Following detailed consideration and further analysis and, having taken into account the above commitments given by the parties, the CCPC has determined that the result of the proposed transaction will not be to substantially lessen competition and, therefore, that the joint venture can be put into effect," it said.
The news has been welcomed by the Synch consortium, which said the decision would allow it to proceed with its plans to launch the app.
"Over the past two years we've all witnessed the rapid growth in the mobile payments market throughout the country," said Inez Cooper, Managing Director of Synch.
"People have become increasingly comfortable paying for goods and services in shops and restaurants with a simple 'tap' with their phone. The Synch app provides a secure, instant and frictionless experience for consumers while also ensuring a seamless connection directly to their existing banking provider, delivering efficiencies for businesses."
She added that the joint venture has already had lots of interest from acquirers, financial institutions and retailers who want to join.
"Some institutions and organisations will be there on day one while others will be added in the weeks and months post launch as we continually grow and evolve our proposition," she said.
"We look forward to licencing many financial institutions, payment service providers, acquirers and retailers and to continually growing the payment ecosystem for the benefit of consumers and businesses in Ireland."
