THERE REALLY IS a Simpsons quote for every occasion. Including, of course, for a new Irish banking payment feature.

Krusty the Clown announces he’s retiring from showbusiness. And the first question he’s asked by a reporter – ‘Why now? Why not 20 years ago?’

It’s hard to shake a similar feeling after Ireland’s pillar banks announced an in-app mobile instant payment service, called Zippay – widely billed as a ‘Revolut rival’.

Much commentary has talked of the move from AIB, Bank of Ireland and Permanent TSB as a way of finally getting with the times. 

But Revolut launched in Ireland 10 years ago. It’s used the last decade to build up a customer base of 3 million people, doing it right under the noses of the traditional high street banks.

So it begs the question – why are Ireland’s lenders only launching a ‘rival’ service now?

Well, before we answer that, we should clarify what the three Irish banks are actually launching.

Zippay will not really be a Revolut rival. 

Revolut is a full-fledged digital banking platform. As it stands, Zippay will be a single feature in the three main banking apps when it launches in ‘early 2026’.

It will let users send money to other banking customers with just a mobile phone number, instead of needing to manually input an IBAN. As things stand, that’s it.

Now, that’s not to talk down on Zippay before it’s even launched. Immediate transfers via mobile phone numbers is an exceptionally important feature. 

Banking customers have been crying out for it, and it’s probably the key reason Revolut grew so fast in Ireland. 

But Revolut is now a fully-fledged digital bank. 

Other services it offers include virtual cards for online use which can be easily frozen, instant access savings accounts which immediately pay interest, an easy to navigate investment platform. Etc, etc, etc.

Another point worth clarifying. There may be some confusion from customers around Zippay and SEPA payments.

What is SEPA? SEPA (Single Euro Payments Area) is a system for making cashless payments across the EU. Irish bank users are likely already familiar with it. 

Essentially, SEPA payments use IBANs (International Bank Account Number). These payments normally take a day or two to be processed.

However, the EU recently introduced legislation which makes SEPA instant payments mandatory from October 9. Here, ‘instant’ refers to money transfers that happen within 10 seconds.

Zippay will work by essentially linking IBANs to phone numbers. Zippay transfers will then be processed via SEPA.

This is actually spelled out in the T’s & C’s by Bank of Ireland: ‘You can only use the Zippay service to send money from accounts which you can also make a SEPA Credit Transfer from the Bank of Ireland App.’

But confusingly, Zippay won’t be using the SEPA *instant* system. What does that mean?

To make it easier to understand, let’s think of SEPA ‘classic’ and SEPA instant. Classic is the current SEPA system, where payments normally take about a day to get processed.

Instant is the payments settled within 10 seconds, which Irish banks must offer by October 9.

Zippay will operate on the SEPA classic system.

Fortunately for customers, this makes zero difference. The Banking and Payments Federation Ireland (BPFI) clarified to the Journal: ‘From a customer’s point of view, Zippay payments will be instant’.

So when you send someone money on Zippay, it will immediately appear in their account. And it can be immediately used by the receiver.

As far as the user is concerned, it doesn’t matter if Zippay is on SEPA ‘classic’ or SEPA ‘instant’.

It just means the underlying transaction will take about a day for the bank to actually process under the older SEPA ‘classic’ system.

Classic vs. Instant

The BPFI said it plans to transfer Zippay to SEPA instant in the future, although there’s no hard deadline.

This then begs the question – why is Zippay built on SEPA ‘classic’ instead of SEPA instant?

This goes back to the issue raised at the start of the article – Zippay’s long development timeline. The system was being built by the banks before the EU announced the mandatory SEPA instant dates.

The banks, keen to roll out immediate mobile payments, decided it would be better to get Zippay up and running first. And then move over to SEPA instant later.

This is likely due to the lesson learned from the first ill-fated attempt at implementing immediate mobile phone payments.

In 2020, the main Irish banks decided to launch a payments app called Yippay (notice the name similarity to Zippay).

While the app never launched and we can’t be sure of how it would’ve worked, it’s likely this would have been more of a true Revolut rival.

However, the launch faced multiple delays. The main issue – the app needed to go through lengthy regulatory approvals processes from the Central Bank and Competition and Consumer Protection Commission. 

In late November 2023, the banks announced they’d pulled the plug on Yippay, citing an ‘elongated timeframe’ due to a ‘combination of factors’.

It was reported at the time that AIB, Permanent TSB, Bank of Ireland and the former KBC Ireland had invested a combined €17 million in the venture.

And to bring this all full circle. The initial decision to try to launch Yippay was clearly motivated by Revolut.

In 2017, the fintech firm had just 30,000 Irish customers.

By 2020, that number had exploded to 1 million - a staggering increase in such a short amount of time, which no doubt contributed to the plans for Yippay.

Initially, many Irish Revolut customers used the app for its instant mobile banking transfers. As it was a much faster and easier way of sending money to friends compared to doing an IBAN transfer.

Customers still tended to stick with the likes of AIB and Bank of Ireland for big financial products, such as mortgages.

But Revolut has not been satisfied just being used as a money transfer tool. The firm has acquired a full banking licence and recently announced plans to launch mortgages in Ireland later this year.

This will provide more direct competition to the high street lenders. Of even more concern for the traditional firms is that Revolut has over 400,000 Irish customers who are under 18. 

The worry for the likes of AIB and Bank of Ireland is that, for these young customers, Revolut would become their primary lender.

This is what has likely pushed the banks to launch Zippay now – it’s an attempt to win back some of the ground ceded to their digital rivals.

Customers are notoriously slow to switch banks. The traditional lenders are desperate to stop Revolut from winning over the next generation of customers. 

In that sense, Zippay is an attempt to prevent upstart digital banks from becoming the dominant force in Irish banking.