- Santander becomes first Western bank to launch real-world Ripple solution
- App will debut in UK, Spain, Poland and Brazil
Spanish banking giant Santander has become the latest big name to announce a new initiative with San Francisco-headquartered fintech startup Ripple. It will launch an international money transfers app later this year that will be powered by Ripple’s technology.
Ripple’s digital coin has fast become one of the most important cryptocurrencies in the worldwide market. The cross-border payments firm has been steadily in the headlines over the last 18 months, securing a raft of experimental collaborations with big names in the remittance sector such as Western Union, MoneyGram, BBVA and Quallix.
The money transfers industry is taking a keen and growing interest in what Ripple has to offer. The advantages of distributed ledgers and digital assets appears to be gaining traction. And in the area of cross-border payments, there’s a lot of scope for improvement – improvements which Ripple claims it can deliver by making these money transfers cheaper, faster and more reliable.
While multiple banks in Asia have already partnered with Ripple to develop a series of pilot projects to test the viability of its technology, Santander is the first major Western bank to have done so. The plan is for the British branch of the global banking group to begin making cross-border payments with XRP at scale – a pretty breathtaking development that few attending the International Fintech Conference in London, where the initiative was unveiled, anticipated.
Announcing the initiative at the conference, Santander’s UK CEO Nathan Bostock said: “This spring, if no one beats us to it, we will be the first large retail bank to carry out cross-border payments at scale with blockchain technology.”
This move is a big deal for Ripple. While there has undoubtedly been considerable interest in its xRapid and xCurrent offerings, no finance company or bank has, until now, endeavoured to implement them in real-world solutions. So far, the technology has been piloted by other firms using internal tests only, making Santander’s decision all the more groundbreaking.
No specific date has yet been revealed, but Bostock’s announcement suggests that it will be sooner rather than later.
Santander’s interest in Ripple goes back to 2015, when it invested in the fintech firm for the first time, a move it repeated in 2016. It also trialled a cross-border payments app powered by Ripple tech with its own staff in 2016.
The bank’s Spain-based Chairman, Ana Patricia Botin, had flagged the forthcoming app launch at the end of January during a presentation of the group’s 2017 results, announcing that it would go live in the UK, Spain, Poland and Brazil. The internal app trial had shown that it could settle money transfers within 24 hours, radically slashing the days needed by traditional international money transfers providers.
Ripple’s technology also allows people to see up front exactly how much a transfer will cost, differentiating it from most of the competition in the cross-border payments business, whose systems involve a series of intermediary agents to transfer money, all of whom require their cut along the way. The result is that the final sum reaching the recipient is frequently less than when it was sent. Due to the fact that the transfer process is so convoluted, it’s often impossible for most providers to give an accurate picture of the real total cost of the transaction.
