The company was being placed as a competitor to the payments transfer company Wise, but while Wise has gone from strength to strength and has also gone public to increase its presence and propel its growth, PagoFX has not had much traction since its launch 15 months ago. It had launched in the UK last December and had extended its services to Spain in the last few months but it seems that the business did not pick up despite all this expansion. The official account is that it is being shut down based on a “strategic review”.
“It has been decided to close the international money transfer service in the UK, Spain, and Belgium,” the bank stated. “PagoFX’s technology and resources will be used to support the wider PagoNxt Group and its customer proposition.”
PagoFX was supposed to be a standalone company and it was looking to get established within the European region with a business model similar to Wise as its customers in the UK and Spain were given debit cards which they could use to send money abroad. The company was targeting this service to SMEs but it came in as a surprise that its service never really took off. The payments and the remittances industry has been growing very strongly over the last few months with many investors pouring in funds to even startups as they view that the digital payments industry would be taking off in the future.
This shutdown should come as a jolt to Santander which would need to do some serious introspection on what went wrong in a business that was supposed to grow well and for which there is ample demand. It did seem to have some strong plans as it had extended its transfer services to Belgium recently, after pushing into UK and Spain, but it just seemed to fail to get any sort of attention or demand from the SMEs despite adding new currencies into the mix. While competitors like Wise continued to grow, PagoFX never really found its footing and that is going to be something that Santander would look into seriously before launching any new products in the future.