“We give our clients the possibility of making immediate payments in Brazilian reals directly from their online banking”

Interview with Antonio Castillo, Head of Projects and International Business Service Model at Banco Santander

One of the services that any internationalized company values ​​from its financial providers is the facilities for making international payments and collections.

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A few days ago Banco Santander launched a new and innovative solution international transfers for companies, to facilitate the business of Spanish companies in Brazil, which until now had to make their payments in euros or dollars and can now do so directly in the local currency, the Brazilian real.

Antonio Castillo, head of Projects and International Business Service Model at Banco Santander, tells us more details. 

 

What is the role that Brazil plays for Banco Santander and especially for the bank's clients?

 

Antonio Castillo: “In the current situation in which we find ourselves, unfortunately, with a war in Ukraine, with COVID outbreaks in China, problems with some components and raw materials that have affected global supply chains, it seems reasonable that companies look for other geographies and look elsewhere when looking for alternative markets. And one of these could be Brazil, for example in the case of raw materials such as oil, iron, cereals or even corn.

 

We must remember that Brazil is the fifth country in the world by area and sixth in number of inhabitants. It represents 40% of Latin American GDP and it is a market of more than 200 million potential consumers. Es one of the main strategic partners outside the European Union. It represents sales of approximately 2.500 million euros and purchases of more than 4.000 million. 

 

Regarding Spanish activity there is around 6.000 companies that exported to Brazil throughout 2021 and about 5.000 that were imported. There are approximately 1.000 companies that have subsidiaries in the country, so with this we can get an idea of ​​the importance that the Brazilian market has for Spain and for all of Europe."  

 

And regarding Banco Santander's presence in the country, what capabilities does it have to help its clients?

 

AC: “Banco Santander has been present in Brazil since 1982, with offices and banking activity around 1997. We currently have, we are talking about a huge market, we are talking about more than 3.500 offices, more than 50.000 employees and over 26 million customers. We have approximately one 10% market share.

 

Of course, our desire is the same as we have in all the geographies in which we are present: to help companies. We have helped more than 400 Spanish companies to start their activity and expand to Brazil in recent years, through our International Desk services.”

 

Speaking specifically about collections and payments in Brazil and its local currency, could you explain a little more about how they work and the differences between deliverable and non-deliverable currencies, such as the Brazilian real?

 

AC: “This is a characteristic of the Latin American market in which there are some countries with currencies that are deliverable or non-deliverable. There are deliverable currencies such as the Mexican peso and others that are not, such as the Brazilian real, Chilean peso, Colombian peso, or the Peruvian sol...The Non-deliverable currencies are basically used to carry out domestic transactions, and cannot be traded outside their local markets. This is done with the basic purpose of preventing fluctuations in the currency, which are often important, and also protect the country's assets. Normally these currencies have convertibility to the dollar or the euro and in order to cover the exposure in the domestic currency, exchange insurance or NDFs are operated.  (non-deliverable forward)”.

 

And taking into account these restrictions that the Brazilian currency has, what is the novelty that Santander now offers to help its clients make payments in Brazil?

 

AC: “The fact that in the case of Brazil there was no possibility of operating from Spain or from Europe with the Brazilian real has made us as an entity look for an alternative for our clients. As we have done? With our desire to help companies grow, not long ago we established a fintech called Pagonxt with the idea of concentrate and manage all Group payments and furthermore create furthermore disruptive products and services that will be channeled through our platform One Trade, which has the characteristic of being 100% digital.

 

Since the end of last March, in addition to other products and services, we launched for our clients the possibility of making payments in Brazilian reals and we became the first Spanish and European entity to offer this service. That is, we offer clients that To date they could only make payments in euros and dollars, processes that were quite laborious, complex in some cases, because when the beneficiaries receive the funds in Brazil they have to document the destination of the funds in order to be able to liquidate them or be able to exchange them into Brazilian real. What we do is give the client the possibility of making these payments directly from their online banking, as it has been operating to date, and eliminate this entire bureaucratic process in one fell swoop, and also with the characteristic that payments are immediate".