Javier Castro - Fotolia

Santander uses blockchain for international payments

Bank is using blockchain to underpin its latest app, which enables customers to make international payments 24 hours a day, which clear the next day

Santander bank is using blockchain technology to underpin a new application for making international payments.

The app is currently being tested by staff in a pilot, with a public launch to come.

The app, which connects to Apple Pay, uses blockchain technology from Ripple, a firm in which Santander has invested through Santander Innoventures.

Through the app, international payments of between £10 and £10,000 can be made 24 hours a day, with funds appearing in the recipient's account the next working day.

Sigga Sigurdardottir, head of customer and innovation at Santander, said blockchain is key to future services. "We 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," she said.

Blockchain is best known as the distributed database technology behind the virtual currency bitcoin, but banks are looking at its wider use.

The peer-to-peer technology uses distributed ledger and advanced encryption to guarantee the provenance of every transaction.

Read more about blockchain

Research firm Forrester said recently that banks could put blockchain under the microscope in a lab environment for the next 10 years.

Banks are trying the technology out, often in collaboration, for different services.

In March 2016, for example, a global banking consortium -- which included Barclays, Royal Bank of Scotland and HSBC -- completed cloud-based tests of five different blockchain technologies.

Meanwhile, Royal Bank of Scotland is looking to take a lead on blockchain. The bank told Computer Weekly in 2015 that it intended to pilot a service based on the technology in 2016, with a view to releasing a product -- likely to be some form of payment service.

Read more on IT for financial services