Spanish megabank Santander Group is expanding its use of Ripple’s technology.
The bank is building a “payment corridor” that would let customers in
Latin America send money to the U.S. instantly for free via One Pay FX,
a mobile app that uses Ripple’s xCurrent software, officials told
CoinDesk.
Currently, only customers in the U.K. and Spain can send money to the
U.S. over One Pay FX. While the bank would not reveal how many Latin
American countries it plans to connect to the corridor, Santander serves
Argentina, Brazil, Uruguay, Chile and Mexico.
Like Santander’s DLT efforts to date, the new payment capability will not involve XRP, the cryptocurrency that Ripple periodically sells to fund operations and that powers its separate xRapid product. Last year, Santander introduced One Pay FX in four countries that account for more than half the bank’s profits: Spain, the U.K., Brazil and Poland.
This offering is getting traction, the bank says.
“Customers who were not doing international transfers are now using
the service, customers who were using international transfer are now
doing it more, and customers who had gone to use fintech competition
have come back because of the One Pay offering,” Cedric Menager, CEO of
One Pay FX, told CoinDesk.
Unlike the SWIFT messaging system that banks traditionally have used
to make international transfers, One Pay FX on xCurrent is instant, has
no fees and gives users a view into currency exchange rates before they
send money, Menager said.
Volume growth
While Santander would not reveal transaction volumes for One Pay FX,
it said those volumes tripled from January 2019 to June. (The bank’s
total cross-border volumes for Spain, including One Pay FX and other
rails, increased 120 percent year-over-year in April.)
Expanding One Pay FX will mean a bigger change for some Latin
American customers, who will go from making international transfers in
branches to instant online payments, than for European customers,
said Menager.
“The international payment experience in the Latin American markets
is even less evolved than in the European markets,” he said. “There are
even parts of the Latin American market where it’s almost impossible to
do an online international payment.”
The corridor will be launched country-by-country, and the bank would not say when the first country would launch.
The bank also plans to bring One Pay FX to U.S. Santander customers
for them to send money abroad but does not have a date for that launch
yet. The U.S. launch will be a heavier lift for the bank because of the
difference in financial regulations.
Santander is also developing Pago FX, which will be an international
payment product for non-Santander customers, in an attempt to win over
these customers from other banks. It hasn’t said what technology this will run on.
“International payments is a way for us to acquire customers having a painful experience with traditional banking,” Manger said.
UPDATE (19, Month 13:30 UTC): This article has been
updated to clarify that the 120 percent year-over-year increase in April
was for all Santander’s Spanish cross-border transfers, not just
xCurrent-powered ones, and that the bank has not said what technology it
will use for the forthcoming Pago FX. Argentina was also added to the
list of Latin American countries Santander serves.
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