Today Banco Santander announced the launch of a money transfer service called PagoFX in the UK. PagoFX will operate as a separate entity and allow UK residents to send money abroad using a mobile application.
PagoFX enables users to make cross border payments using debit cards issued by any UK bank or financial institution. In the current climate of the COVID-19 pandemic, the service will be available free of cost until mid-June up to a cumulative transfer limit of £3,000 ($3,750)per user. Otherwise, normal fees are 0.7% to 0.8%.
Banco Santander Group is headquartered in Spain and, as of 2017, ranked as the fifth-largest bank in Europe with $1.4 trillion in total assets under management.
Two years ago, Santander launched an in-house solution for international remittances called One Pay FX targeted only at Santander clients. The bank said Pago FX is the open-market version of One Pay FX.
“PagoFX makes it possible to transfer money internationally easily, at low cost, and with the security and peace of mind that comes from a regulated entity backed by an international bank,” said Ana Botín, Group executive chairman of Banco Santander.
PagoFX is regulated by UK’s Financial Conduct Authority (FCA) and currently offers international payments in selected currencies from the UK to the US, the eurozone, Poland, Switzerland, Norway, Denmark, Sweden, and the Czech Republic.
The company aims to roll out to other European markets this year and reach 20 markets in the next three to four years.
With the launch, Santander is going head to head with Transferwise, the popular UK payments startup that processes £5 billion in payments a month and boasts 7 million customers. Its fees can be as low as 0.37%.
The internal One Pay FX solution uses RippleNet, and although the bank says the new PagoFX is similar, it’s not the same. FinExtra reported that PagoFX does not use RippleNet and this has since been confirmed to Ledger Insights by PagoFX which said “our payment platform uses a variety of channels and counterparts to ensure our best-in-class service”.
In 2015 Santander invested $4 million in Ripple through its InnoVentures fund.
Ledger Insights has previously covered the partnership of another UK-based money transfer service, TranferGo, and Ripple for blockchain cross-border remittances to India, the rest of Southeast Asia, Latin America and Africa.
Meanwhile, Banco Santander has been actively exploring other blockchain applications. Until now, the bank has trialed blockchain for proxy voting, issuing bonds, automated payments, and payments for public transport services.