Multinational banking giant Banco Santander and four Spanish banks have successfully finalized a proof-of-concept for payments using smart contracts.

The PoC was coordinated with IberPay, the company that oversees the Spanish Payment System.

Trial confirms blockchain’s feasibility for payments

In a statement on July 15, IberPay said the PoC had “confirmed the feasibility of applying blockchain technology to the field of payments" and its successful connection to the national payment system.

Using smart contracts automates the execution and settlement of payments once certain pre-conditions are met.

Alongside IberPay and Banco Santander, the four banks involved were Banco Sabadell — Spain’s fifth-largest banking group — BBVA, Bankia and Caixabank. 

Grant Thornton provided consultancy services to IberPay in testing the PoC using an interbank blockchain network with seven operating nodes and successfully executing over 20,000 automated immediate transactions.

The average processing time per completed payment was reportedly 2.5 seconds, fostering confidence in its applicability to the real world.

IberPay has said the PoC functioned “with the maximal guarantees of security, efficiency, traceability and integrity, as well as compliance with current regulations.”

Santander’s previous use of blockchain technology

As reported, Banco Santander has been a forerunner in testing and implementing blockchain technology for financial services, last winter redeeming a $20 million bond using the public Ethereum blockchain.

Santander had issued its first end-to-end blockchain bond using the public network in September 2019. 

The bank has also integrated Ripple’s xCurrent technology into its global payments services for retail clients, most recently announcing plans to extend the services to Latin America.