Four leading banks may apply again to the competition watchdog to launch an instant payment app to rival Revolut.
The plans were knocked back by the Competition and Consumer Protection Commission (CCPC) this week. It said it was unable to determine if the banks were planning a merger or an acquisition.
The application was deemed invalid as the banks had not provided full details of the proposed joint venture plans under competition law.
Competition experts said the mistake was a very basic one.
Questions have been raised about the bungle as a number of top legal experts and a leading consultancy were involved in preparing the submission to the CCPC.
Confidence is their ability to deliver the new app has now been seriously dented.
Some experts have suggested the banks had intentionally scuttled their own plans, aware that the coming together of rival banks would breach competition law.
It is the first time in more than 20 years that rival banks have joined forces to take on such a project.
Calling the venture ‘Project Pegasus’, AIB, Bank of Ireland, Permanent TSB and KBC formed a company called Synch Payments to deliver a “multi-bank payment app”.
The Banking and Payments Federation Ireland (BPFI) is co-ordinating the joint venture.
Questions have been asked as to why the banks would not adapt their systems to use the European Union’s Sepa Instant payment system rather than developing their own payment app. Sepa Instant can transfer of up to €15,000 in less than ten seconds.
BPFI, headed by Brian Hayes, was asked if the real agenda was about blocking new entrants into the Irish market.
An BPFI spokesperson said: “The new multi-banking app which Synch Payments DAC aims to launch this year, subject to approval by the CCPC, will allow customers to carry out instant payments in real time.
“It has been designed and built around the classic Sepa infrastructure (Sepa Credit Transfer system), however it can transfer over to the Sepa Instant infrastructure as banks and other financial institutions migrate over to that system with time.
“The launch of this new multi-banking app will give customers the benefit of an instant payments experience in a shorter timeframe rather than waiting until a future date when banks have joined the Sepa Instant payment scheme.”
The banks have insisted that if they go ahead with their new Synch system it will be open to all banks and financial institutions here.
Banking analyst at Goodbody Stockbrokers Eamonn Hughes said the initial rejection by the competition watchdog was a procedural issue, and the banks are likely to reapply for competition clearance.