Santander to use Ripple for cross-border payments at scale by May
Santander aims to be the first big bank to use Ripple at scale for more competitive international transfers.
UK bank Santander aims to be the first large retail bank to carry out cross-border payments at scale with blockchain technology, specifically Ripple. The move will take place on Santander's new payments app, which will go live in Spain, Brazil, the UK and Poland. Santander hopes to offer customers same-day international transfers with all fees being shown completely up front, Business Insider reports.
This is in sharp contrast to SWIFT international bank transfers, where correspondent banks will take an unpredictable cut of money en route. And if the payer wants to pay the fees themselves up front, then they'll incur an additional fee of around $30 to $40 (PDF) on top of all the other fees.
Santander said that when it launched its internal app trial, it was able to settle transfers within 24 hours, compared to the several days it takes with traditional cross-border payment providers.
"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," said Santander's UK CEO Nathan Bostock at the London International Fintech conference.
No exact launch date was given, but springtime in the UK runs out in May, so the system might go live within a couple of months.
To date, there is no big institution yet using blockchain technology for international payments at scale, although a number of banks and companies are already using Ripple in relatively small amounts, in specific payment corridors. But these are still mostly regarded as system tests rather than for actual large scale use. As such, Santander might be the first to take this significant step in international payment technology.
However, it's possible that someone else will get there first. IBM is currently using Stellar Lumens, a Ripple competitor, in small amounts for itself. It's currently onboarding clients to its own Stellar-based international payments solution and aims to take it live in a large scale in Q2 2018.
At this stage, either IBM or Santander might get there first.
With at-scale international payments systems using blockchain technology, banks, remittance companies and traditional cross-border payment providers might soon find themselves needing to upgrade in order to remain competitive.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.
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