Santander U.K. has
its introduction of blockchain technology for international
payments through a new app that is currently being rolled out as a
staff pilot. The bank plans to make the application, which is only
available on Apple's iOS, available to consumers after it completes
the pilot program. The announcement makes Santander the first bank
in the U.K. to use blockchain for international payments.
The new Santander app connects to Apple Pay, where users can
confirm payments securely using Touch ID. It lets users transfer
between £10 and £10,000, and payments can be made from British
pounds to euros and U.S. dollars. Currently, payments made in euros
can be sent to 21 countries and U.S. dollar payments to the United
"The need for finance has evolved from providing a physical
pound in your pocket or card in your purse, where you pay at a
till, to being seamlessly integrated into a new, always on,
connected lifestyle," said Sigga Sigurdardottir, head of customer
and innovation at Santander. "At Santander we work hard to ensure
our banking is simple, personal and fair and believe new blockchain
technology will play a transformational role in the way we achieve
our goals and better serve our customers, adding value by creating
more choice and convenience."
The Santander app is powered by the blockchain technology
implementation developed by Ripple, a company in which Santander
Innoventures, the $100 million fintech venture capital fund of
Santander Group, has invested. Working with Ripple builds on
Santander's philosophy of collaborating with the most innovative
companies to consistently provide better services to customers. In
that, in a paper titled "
The Fintech 2.0 Paper: Rebooting financial
," Santander Innoventures issued "a call to action to banks,
financial institutions and financial technology (fintech)
businesses to work together to undertake a fundamental 'reboot' of
the core processes, systems and infrastructure of the banking
According to Ripple, its technology offers a real-time
cross-currency settlement solution that is flexible enough to
comply with the risk policy, privacy and compliance needs of banks.
"It is architected to fit within your bank's existing
infrastructure, resulting in minimal integration overhead and
"Ripple is redefining the way that value moves around the world,
and today we're already enabling real-time, affordable
international settlement between banks who have adopted our
solutions," said Ripple cofounder and CEO Chris Larsen. "As an
early adopter and pioneer in the banking industry, Santander is the
first bank in the world to transfer real funds externally. In doing
so, they are creating a new, exemplary standard of service." The
notes that security and regulatory compliance is central to all
activity undertaken at Santander and their Ripple-powered app has
already undergone the same rigorous testing all new technology goes
through ahead of roll out.
The move is a much-needed response to the upcoming wave of
digital payment providers that threatens to lure customers away
from the banks.
"Clearly, it's an area where, as an industry, we don't have as
good a customer experience as we could do . . . there are a lot of
pain points," said Ed Metzger, head of innovation, technology and
operations at Santander U.K., as
The Financial Times
. "There's lots of activity in international payments." Metzger
added that the reason why new digital players have been able to
make progress is because "customer experiences through normal
channels aren't great."
"It's the first time a U.K. bank has sent payments of this type
via Ripple and launched it as a commercial service,"
. "Many people are doing lab style experiments, the key difference
here is about getting real people to send real money for real
purposes. I just paid my wife, who is Spanish, some money to a
Spanish bank account this morning."
notes that Santander is one of several major banks, including
Citigroup, UBS and Barclays, striving to find ways to exploit the
distributed ledger technology behind Bitcoin to cut costs and stay
at the leading edge of modern fintech.
reported that Barclays
formed a partnership
with "Bitcoin bank" Circle in a move that received welcoming
support from U.K. authorities. Barclays Corporate Banking is
providing the account that Circle needs to store sterling for
consumers and the infrastructure to allow transfers from any U.K.
bank account in and out of Circle. An interesting feature of the
Barclays/Circle initiative is that it uses the standard, public
Bitcoin blockchain, instead of an alternative implementation.