Santander, Ripple Use Blockchain To Settle Global Payments

Beyond the vagaries of cryptocurrencies, the price swings and headlines, and the investigations and speculation, use cases emerge. If entranced by bitcoin’s ebbs and flows, one would be forgiven for being caught off guard (if they are, in fact, off guard) to find that a major bank is coming to market with a service backed by blockchain, which now is live and available — and can help make sure that funds cross borders with speed and surety.

Spanish bank Banco Santander said that it is linking with Ripple to offer the first mobile service focused on payments rendered across borders. The service, Santander One Pay FX, allows for payments to be processed in seconds and settled the same day, a feature newly available to millions of the bank’s customers throughout the continent.

One Pay FX’s official debut comes two months after Santander said it would bring that service to market. In April, Santander had said that, in Spain, users of the service could transfer funds to the United Kingdom and the United States. In Brazil and Poland, said Santander, customers can transfer to the U.K. In illustrative use cases, users can send dollars to the U.S. and pounds to the U.K. With a nod to other fund flows, customers in the U.K. can send euros to 21 countries.

The announcement of One Pay FX and planned rollout across Europe, the company said in a release, allows speed and safety in cross-border payments, where, along traditional conduits, international transactions took three to five days to clear. The company said that the mobile-first user interface (UI) and blockchain infrastructure ties together the total cost of sending payments, embracing (beyond the total payment) bank fees, foreign exchange rates, delivery time quotes and payment receipts.

The firms have said that the Santander app use Ripple’s xCurrent technology to underpin payments and tracking.

In an interview with Head of Innovation Ed Metzger at Santander U.K., in tandem with the One Pay FX rollout, he stated that the motivation to bring One Pay FX to market comes as the firm has taken note of the growing expectation from consumers that sending international payments be easier and less friction-filled than it has been seen in the past. Blockchain stood out as a way to alleviate some of those frictions, said the executive, and after a pilot with Ripple two years ago, the firms began rolling out this service to Santander’s customers.

Santander is no stranger to blockchain. As Metzger noted, the firm is a founding member of Enterprise Ethereum Alliance (EEA), along with other large international banks and companies, such as Alastria — a specific, countrywide blockchain network in Spain. Santander also forms — along with other international banks — part of the Utility Settlement Coin (USC), a project that researches and aims to promote the use of digital money between financial institutions (FIs) and with central banks. It has also invested in several blockchain companies through InnoVentures, its venture capital fund. InnoVentures invested in Ripple, the creator of xCurrent, in 2015.

Embracing technology to address the long-extant pain points is not without its challenges, said Metzger.

“Blockchain or distributed ledger technology covers a wide range of new technology approaches, but using some of the same building blocks and concepts [of other approaches],” he said.  “The key is choosing the most appropriate of the different approaches and technologies with the particular problem being solved.”

When asked by PYMNTS about the rollout’s progression (where One Pay FX is debuting in the U.K., Brazil and Poland), Metzger stated that “Santander’s largest markets by profits are Brazil, Spain and U.K. We expect to roll the service out across more countries in the coming months.”

The company, he said, will add more features as the rollout gains traction. Metzger stated that the company will also offer instant international payments in several markets, which would represent significant improvements in speed over existing international payments offerings.