As well as being one of the biggest banks in the world, Banco Santander also has a reputation as one of the finance industry’s most innovative organizations. Since the launch of its innovation fund, InnoVentures, in 2014, Santander has invested heavily in a range of digital technologies. But every innovation must directly benefit the bank’s millions of customers, like One Pay FX—the transformative cross-border payments service created in partnership with Ripple.
“We want to be at the forefront of the merging of finance and technology,” explained One Pay FX
Chief Technology Officer, Ed Metzger, “but our innovation is always customer led. Customers told us that the international payments process could be better so we partnered with Ripple to explore how blockchain could make transactions faster, cheaper and more transparent.”
International payments are just one of a large range of services that Santander offers to its 146 million retail and commercial customers around the world. But the frequency of feedback about the lack of clarity and transparency in the traditional process suggested that an opportunity existed for any bank that could overcome these challenges.
“Customers told us that they never knew how much money was going to get to their recipient because it was never clear what the exchange rate would be or what fees would be charged,” recalled Metzger. “On top of that, they had no transparency about when the payment was going to get there. They just knew it would take 3-5 days. This type of feedback is standard across the industry. No one was solving the problem.”
The Pain of Slow, Expensive Cross-Border Payments
Santander’s search for an innovative solution never focused on a specific technology. Instead the bank looked for any way to solve their customer’s specific pain points, which is why Ripple proved to be an ideal partner.
“Ripple helps us directly address the issues raised by our customers,” said Metzger. “Whether they are putting down a deposit on a holiday rental or paying a foreign supplier, they see exactly how much will arrive when they’re making the payment and have certainty about when it will get there. Ripple also helps us address the speed issue of international transactions. Some payments on One Pay FX now happen instantly. I made a payment recently from an account I have in Spain to one in the UK and received text alerts about the transaction from both accounts within seconds of one another.”
Santander launched One Pay FX in the UK, Poland, Brazil and Spain. The cheaper transaction fees and faster settlement speeds along with the enhanced transparency around every payment generated very positive customer feedback. The service also received a Silver Award at the 2018 Distribution and Marketing Innovation Awards. But even more significant for Metzger, is how One Pay FX has changed customer behaviour.
“First, we’re seeing individual customers make more international payments on the app,” he noted. “Before they may have used a dedicated remittances service, but now they’re coming back to us. In addition, customers now treat an international payment like a domestic transfer. They have so much confidence in the low cost, same day process, it’s no longer a big deal to send money abroad.”
Better Payments to Help More People Prosper
One Pay FX has been launched in six countries and payments can be sent to two dozen countries, including all the euro zone. Santander Executive Chairman Ana Botín has said that half of the bank’s annual international transfers can now be handled by the app. This represents a currency corridor coverage which would cover approximately half of the current flows. Santander continues to examine customer needs and feedback to decide on next steps to grow the program.
“We’re looking to expand One Pay FX to new territories and customer segments so more people can benefit from faster, cheaper and more transparent international payments,” concluded Metzger. “The partnership with Ripple is key because our success so far gives us the confidence to move ahead even faster. It’s not just the technology. Being part of RippleNet has helped us to forge sustainable and scalable relationships with other financial institutions around the world. By offering more customers a better way of sending money abroad, we’re achieving our goal of helping people and companies prosper.”