Santander launches PagoFX, a TransferWise competitor


Spanish bank Santander has launched a new product called PagoFX. As the name suggests, PagoFX focuses on foreign exchange and lets you send money in other currencies. In other words, it’s a TransferWise competitor. It is completely separated from Satander’s retail bank products. You don’t need a Santander bank account.

While Santander puts its logo on the website of PagoFX, it looks more like a fintech startup website. PagoFX wants to help you save money on international transfers, acting as an intermediary step between a bank account in one currency and another bank account in another currency.

Traditional banks charge high fees for international transfers. Banks add a markup on the exchange rate, charge you exchange fees on top of that and sometimes charge you if you initiate transfers to a foreign bank account.

That’s why companies like TransferWise, WorldRemit, Azimo and Revolut have been thriving. You send money to their bank account first or you use a debit card. Then they take care of exchanging money and sending it again to your recipient.

PagoFX promises simple and transparent fees combined with the Santander brand. The company’s product is currently live in the U.K., but PagoFX already has plans to expand to other European countries. You can send money to the Eurozone, the U.S., Poland, Switzerland, Sweden, Norway, Denmark and the Czech Republic.

After downloading the app and verifying your identity, you send money by associating your debit card with your account and adding the IBAN account information of your recipient. PagoFX charges 0.7% on most transfers and 0.8% on transfers to the U.S., Poland and Denmark. PagoFX is waving fees up to £3,000 for the first couple of months.

TransferWise lets you choose between low cost transfers and “fast and easy” transfers. The latter option also leverages your debit card to speed up the process. If we compare the fast and easy fee with PagoFX, here’s what it looks like.

  • For a £1,000 transfer, your recipient gets €1,148.50 with PagoFX, €1,140.82 with TransferWise. After PagoFX stops waving fees, your recipient will get €1,140.46.
  • For a £5,000 transfer, your recipient gets €5,726.92 with PagoFX, €5,705.25 with TransferWise. After PagoFX stops waving fees, your recipient will get €5,710.88.
  • For a £10,000 transfer, your recipient gets €11,426.73 with PagoFX, €11,410.82 with TransferWise. After PagoFX stops waving fees, your recipient will get €11,370.74.

PagoFX is particularly cheap right now because of the current promotion on fees. After that, it’ll depend on how much you plan on sending. But don’t forget that TransferWise has a slower and cheaper option if you’re willing to wait another day and transfer money to TransferWise from your bank account first.





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