Zippay and the Innovator's Dilemma

Ireland's three pillar banks (AIB, Bank of Ireland, and PTSB) announced last week that they're launching Zippay in early 2026. This collaborative payment service, powered by Italian provider Nexi, represents traditional banking's belated response to the fintech revolution that has already transformed Ireland's financial landscape. With Revolut capturing 3 million Irish customers and neobanks controlling roughly 25% of the digital banking market, Zippay feels like showing up to a party after everyone's already gone home.

The real question isn't whether Zippay will work. It's whether playing catch-up can ever compete with genuine innovation. While the pillar banks still control about 85% of traditional Irish banking, they're bleeding payment market share to competitors who rebuilt financial services from scratch. Zippay's consortium approach tries to win back lost ground through collaboration rather than innovation. But history shows this strategy faces serious challenges.

The European Playbook: When Bank Consortia Actually Work

There's a clear pattern across Europe. When traditional banks coordinate around instant, phone-number-based payment schemes, they can achieve widespread adoption quickly.

Sweden's Swish shows what success looks like. Launched in 2012 by major banks and connected to real-time payment rails, Swish reached 86% population penetration. According to the Swedish Riksbank, it became the second most popular payment method after cards. Crucially, Swish evolved beyond person-to-person transfers into retail and e-commerce, creating genuine network effects.

Spain's Bizum followed a similar path. More than 30 banks embedded Bizum directly into their apps, reaching over 27 million users who process more than a billion payments yearly. Now Bizum is expanding across borders with partnerships in Italy and Portugal, proving that early interoperability planning pays off.

Poland's BLIK evolved rapidly from e-commerce authentication to tap-to-pay at checkout. Bank-owned and strategically focused, BLIK recorded 665 million transactions in Q1 2025 alone. It shows how national account-to-account schemes can actually displace card payments at physical stores.

Switzerland's TWINT gained over 6 million users, competing directly with Apple Pay and Google Pay, helped by strong regulatory backing. The Netherlands' iDEAL captured roughly 70% of online payments, becoming the benchmark for domestic payment dominance.

Why Nexi Makes Sense (Even If It's Boring)

Nexi isn't a household name in Ireland, but they're deeply embedded in European payments infrastructure. Starting from the Italian interbank consortium ICBPI (founded way back in 1939), Nexi completed a €7.8 billion acquisition of Nordic processor Nets in 2021. That deal created Europe's biggest payments company, serving over 250 banks across 25 countries.

Nexi runs the infrastructure behind instant payments and account-to-account methods across multiple markets. In Italy, they partnered with BANCOMAT on centralized infrastructure and helped extend BANCOMAT Pay to Amazon.it. Their developer platform exposes account-to-account methods like iDEAL and Bancontact through standardized APIs.

Here's the kicker: Irish banks already know Nexi's technology. Back in 2022, the previous bank joint venture picked Nexi as its platform partner before regulatory issues killed that project. So there's institutional memory and familiarity.

For banks prioritizing reliable infrastructure over flashy innovation, Nexi is the sensible choice. It maximizes the chances that payments actually work from day one and lets them copy proven patterns from Bizum, Swish, and others.

The Innovation They Could Have Built Instead

If the goal was to leapfrog instead of copy, here's what an incumbent consortium could have prioritized:

Merchant acceptance from launch. The winning national schemes moved from person-to-person into retail and e-commerce quickly. Zippay could have launched with QR codes at checkout, merchant onboarding in hours instead of weeks, and pricing that beats card fees for small businesses. This changes behavior, not just facilitates transfers.

Cross-border from day one. Bizum's partnerships with BANCOMAT Pay and MB WAY show how interoperability works when planned early rather than bolted on later. Zippay could have targeted Ireland's massive diaspora and tourism flows, positioning the country as a leader in European wallet connections rather than purely domestic infrastructure.

Programmable payment rails. Instead of copying social payment apps, truly innovative functionality would include programmable direct debits and timed payments for rent, subscriptions, school fees, and invoicing. These could be exposed through APIs for local software companies and marketplace operators. Nexi's infrastructure supports this, but it would require ambition beyond basic transfers.

Shared fraud protection. A cross-bank fraud detection system, shared device reputation, and verified digital identity could create security levels that individual neobanks and card schemes couldn't match. This would be genuinely innovative while serving broader public interest.

Open developer platform. Publishing comprehensive APIs with sandbox environments, reference apps, and transparent revenue-sharing for fintech partners would attract local innovation. Think "Bizum for Developers" with clear pricing and service guarantees.

Instead, Zippay delivers features that were cutting-edge in 2012.

Why Neobanks Stay on the Sidelines

Revolut, N26, and Bunq deliberately avoid traditional bank consortia for strategic reasons that consortium participation would undermine.

These companies built cloud-native, API-first technology stacks that enable rapid feature deployment, impossible within committee-driven structures. Revolut processes huge volumes while launching new features in weeks. N26's microservices architecture drove 40% revenue growth to €440 million in 2024, showing the competitive advantage of architectural agility.

Revenue models matter too. Neobanks generate income through subscriptions, foreign exchange margins, lending, and investment products. Revolut's push into Irish mortgages and business banking shows its strategy to capture complete customer relationships, not just transaction processing.

Most importantly, neobanks differentiate through superior user experiences targeting digitally native customers aged 18-35 who expect instant account opening, seamless international features, and mobile-first banking. Joining Zippay would legitimize traditional bank digital efforts while undermining the experience advantages that drive customer acquisition.

What Zippay Offers and Where It Falls Short

Zippay launches with real advantages: automatic enrollment across 5+ million existing customers, full Irish banking licenses with €100,000 deposit protection, and integration within established banking apps (no separate downloads needed).

Features include €1,000 daily sending limits, €500 request limits, and bill splitting for up to 30 people. Real-time settlement uses the existing SEPA instant payment infrastructure for reliability. These capabilities meet basic expectations without exceeding them.

But critical gaps create competitive problems. Multi-currency support is missing despite Ireland's internationally oriented workforce. Investment options, competitive savings rates, and broader financial ecosystems that keep customers engaged are absent. The platform essentially recreates 2018-era fintech features instead of advancing payment innovation.

Consumer behavior increasingly favors mobile-first financial experiences with global reach and intelligent money management. Zippay enters markets where alternatives already have significant head starts and network effects.

What This Means for Irish Fintech

Though Nexi says Zippay will be available to all financial institutions with IBAN accounts and mobile apps, actual access terms remain unclear. Integration fees managed by Nexi could create barriers for smaller companies. The three banks control customer onboarding and user experience, potentially limiting innovative approaches.

Historical European payment consortia show disappointing accessibility results. The Nordic P27 initiative promised "open-access and common infrastructure" but collapsed before delivering meaningful third-party access. EPI/Wero bought existing platforms like iDEAL instead of fostering startup innovation.

Ireland's regulatory environment lags European peers in open banking implementation. Basic PSD2 compliance meets minimum requirements but lacks comprehensive frameworks like Britain's open banking ecosystem. PSD3 implementation expected in 2026 might encourage platform openness through enhanced payment service provider rights.

For startups, better strategies probably involve building complementary services around Zippay's edges rather than competing directly. Cross-border remittances for Ireland's diaspora, specialized business payment workflows, or industry-specific solutions that use Zippay's rails while adding unique value seem more promising than head-to-head consumer payment competition.

Looking Forward: Three Likely Scenarios

Zippay's early 2026 launch coincides with ongoing disruption from Ulster Bank and KBC's 2023 exits, which closed about 1.3 million accounts while opening replacement accounts across remaining institutions. This customer migration creates openness to new financial services while simultaneously accelerating neobank adoption among digitally oriented consumers.

European banking consolidation around consortium payment solutions seems increasingly likely as traditional institutions realize individual digital transformation can't match neobank development speed. Similar defensive initiatives are appearing across France, Germany, and Spain. But structural limits on innovation pace and customer experience may ultimately benefit independent neobank strategies focused on user experience over institutional risk management.

The Bottom Line

Zippay represents traditional Irish banking's gradual shift from denial toward grudging adaptation when facing fintech disruption. While addressing immediate competitive pressures through proven European models, the initiative's defensive nature and limited ambition suggest it will slow rather than reverse market share losses to agile competitors.

Success requires flawless execution, rapid feature expansion beyond basic payments, and effective marketing to younger demographics. These are areas where traditional banks historically underperform compared to digital-native competitors. The three-bank structure might enable faster decisions than larger European initiatives, but competing institutional priorities and risk-averse cultures remain significant obstacles.

Most importantly, Zippay shows Irish banking finally recognizes that competing on customer experience rather than regulatory protection has become essential. This mindset shift might prove more significant than specific technical features delivered through the platform. But without breakthrough innovation or comprehensive open architecture enabling ecosystem development, Zippay risks becoming another defensive measure that sophisticated competitors simply work around.

The broader lesson for Ireland's financial services remains clear: consortium approaches can deliver incremental improvements and infrastructure reliability, but can't match the innovation speed of focused, independent competitors without legacy constraints or committee governance. As financial services increasingly become technology businesses where user experience and development agility determine outcomes, traditional banks must choose between genuine transformation and gradual diminishment within the payments ecosystem. Zippay suggests they've picked a middle path that might satisfy neither stability nor innovation objectives.