Santander launches UK money transfer app to fend off competition from fintechs

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MADRID (Reuters) – Santander SAN.MC On Thursday, launched a currency service app in the UK that will initially be free for transfers of up to 3,000 pounds ($ 3,740) due to the coronavirus pandemic, as lenders try to fend off competition from start-ups. ups in the payments industry.

FILE PHOTO: The Santander Bank logo is seen at a branch in Mexico City, Mexico April 12, 2019. REUTERS / Edgard Garrido

Santander said its PagoFX, a low-cost international money transfer service owned entirely by a mobile app, would be available through a mobile app and allow UK residents with a debit card issued by any bank or entity. UK financial institution to send money abroad from their smartphone at low cost and using real-time exchange rates.

Banks, already struggling to increase profits due to low interest rates, face increasing competition from tech start-ups like the PayPal tech platform. PYPO.L and the likes of London-based TransferWise, which offer foreign currency payments to retail and small business customers with lower fees.

Santander said on Thursday that the service will also be rolled out to independent traders and small and medium-sized businesses in the UK through the PagoFX website and mobile app in the near future.

Cedric Menager, CEO of PagoFX, told Reuters in a telephone interview that the plan was “to expand into key markets in Europe this year, then within three or four years we plan to be in more. of 20 countries ”.

According to a September report by professional services firm Accenture, banks are expected to lose up to $ 280 billion in payment transaction revenue by 2025, as new start-ups grow stronger.

Menager, who gave no short- or medium-term targets, said that given the coronavirus outbreak, we “felt it was even more important to have a proposal like this to send money at the lowest cost ”.

Until June 16, 2020, PagoFX will waive international money transfer fees on transactions up to a limit of £ 3,000 per user, Santander said in its statement.

Beyond this limit, it would charge a fee of between 0.70% and 0.80%.

Santander said the new service is part of its digital transformation sketched in 2019, which includes investments of more than € 20 billion ($ 21.72 billion) in technology over the next four years.

Report by Jesús Aguado; edited by Jason Neely and Steve Orlofsky

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