Santander U.K. has announced 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 States only.
“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 June 2015, Bitcoin Magazine reported that, in a paper titled “The Fintech 2.0 Paper: Rebooting financial services,” 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 industry.”
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 business disruption,” notes the Ripple website.
“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 Ripple announcement 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 reported by 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,” Metzger told Bloomberg News. “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.”
Bloomberg News 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.
In April, Bitcoin Magazine 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.
The post Santander Becomes First U.K. Bank to Introduce Blockchain Technology for International Payments appeared first on Bitcoin Magazine.
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