Santander’s payment arm, PagoNxt, reported a very positive start to 2023 with Q1 revenues surging 50% to €243m.
The division comprises several payment related units including Ebury for trade finance, Payments Hub for wholesale account-to-account payments and merchant services provider Getnet, which is of particular interest to Business of Payments.
Overall operating expenses at PagoNxt grew 46% to €278m resulting in an operating loss of €34m, slightly wider than the deficit of €28m recorded in the same quarter of 2022.
Getnet payment volume rose 34% to €45.6bn. Total transactions grew 32% to 2.132bn exceeding managements’ long-term target of 15% compound annual growth. Getnet’s average transaction value was €21.39.
Getnet’s operations closely follow Santander’s global footprint, with a focus on Latin America and Iberia. The company experienced a significant increase in volume in Mexico, with a 39% rise as it completed the migration of customers from Elavon, Santander’s former partner. In other Latin American countries, Getnet has launched in Argentina with Santander and reports further progress in Uruguay and Chile, where it will face competition from Global Payments, which inherited a local bank partnership after its acquisition of EVO Payments.
In Europe, Getnet’s volume grew by 35%, driven by strong performances in Spain and Portugal, where it recently launched a new set of propositions with Santander. These include an Android terminal with local value add services. Management says that it will complement the in-house bank distribution channel with direct sales.
Unlike some competitors, notably Sabadell, Santander’s management has reiterated its commitment to managing merchant payments in-house. At the recent Capital Markets Day, Santander revealed the killer statistic that banking customers that also take POS acquiring generate between 1.6 and 2.9 times the margin of those that do not. This underlines the strong synergy between payments and business banking.
