Multinational commercial bank and financial services company Santander Group will use the Ripple-powered One Pay FX app to facilitate instant cross-border payments between countries in Latin America and the US.
The tool currently allows end-users from the UK and Spain to send money to the US. The app is also present in the Polish market.
However, following a recent announcement, people from several countries across Latin America will soon be able to use the app to send money to the US without fees.
Santander Group is present in five countries in Latin America – Argentina, Brazil, Chile, Mexico, and Uruguay. For now, only Brazil has introduced the app, and it remains to be seen which other countries will benefit from the new service.
Volumes tripled in six months
Santander Group is planning to use One Pay FX to make remittance payments cheaper and faster in Latin America. The company started using the app last year and, in 2019 so far, it has seen excellent results.
People have used One Pay FX for international transfers in the UK, Spain, Poland, other parts of Europe, and Brazil. The Spanish bank saw its volumes triple from January to June this year.
Cedric Menager, CEO of One Pay FX, commented:
“Customers who were not doing international transfers are now using the service, customers who were using international transfer are now doing it more, and customers who had gone to use fintech competition have come back because of the One Pay offering.”
The app could generate a revolution in the payments market in Latin America. People from many countries in this region struggle to make international transfers due to a lack of financial tools and dedicated services.
Santander Group aims to enter the US market
One Pay FX makes international payments a breeze, but it’s still far from reaching its full potential. The lion’s share of the market is a possibility if Santander Group manages to establish a presence in the US.
One Pay FX will make payments from Latin America to the US cheaper and faster, but the big money travels in the opposite direction. The expansion is useful, but the next step is the one that will change the game for good.
The remittance market to Latin America and the Caribbean reached $85 billion in 2018. Whoever manages to make these transfers cheaper and faster will win the jackpot. And Santander Group seems to be working on it. The Spanish bank plans to bring its products to US-based customers, although operations are currently slow due to differences in financial regulations.
One Pay FX doesn’t use XRP
One Pay FX is a Ripple-powered financial tool, but it doesn’t use the XRP cryptocurrency for international transfers. The app uses xCurrent software, Ripple’s enterprise product that enables banks to process cross-border payments with end-to-end tracking.
The technology used to power One Pay FX makes same-day international payments possible. Developers even say that the app can process transactions in less than a minute.
The service comes with a series of benefits that the traditional SWIFT system fails to provide. Not only does One Pay FX transfer funds without fees, but it also shows users information about currency exchange rates before sending the money.
One Pay FX users receive a digital wallet and a personal finance manager with their account. Santander Group also provides help aiding person-to-person payments for customers who need assistance.
One Pay FX is a separate product from Ripple’s XRapid, a service that uses XRP to enable instant liquidity for cross-border transactions.
More partnerships between banks and fintech
Santander Group isn’t the only bank to notice the gap in the financial markets in Latin American countries.
The remittance market in this continent has seen rising interest from fintech companies and banks from all over the world. Established firms in the market are now ready to collaborate with blockchain-based projects to speed up international money transfers.
For example, another large banking services provider in Latin America – Bantotal – has announced a collaboration with cryptocurrency exchange platform Bitex. The two companies are targeting the same remittance market and are looking to use BTC to facilitate transfers. The project includes more countries and banks, but it doesn’t use Ripple technology to speed up processes.
The takeaway
Ripple continues to consolidate its position as an effective solution for the multiple problems in the global remittance market. Its new One Pay FX product – developed for Santander Group – seems to have been very well received by the public and, most probably, its arrival in the US market is just a matter of time.
At the same time, the Ripple-powered app helps the Spanish bank to gain and retain customers, with excellent results. That’s good news for future collaborations between crypto and traditional banks, which could help further cryptocurrency adoption.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.