In the fast-changing world of financial services, modernizing payments technology has become essential for businesses looking to reduce costs, enhance customer experiences, and stay competitive. Santander Consumer, a full-spectrum auto lender, stands as a prime example of how bold leadership and strategic decision-making can transform payments infrastructure to deliver long-term value.

On a PaymentsJournal podcast, Santander Consumer Chief Technology Officer, Don Smith, spoke with PayNearMe Chief Revenue Officer Mike Kaplan and James Wester, Co-Head of Payments at Javelin Strategy & Research, about Santander Consumer’s approach to modernization and the benefits the company gained from it.

Why Payments Modernization Matters

Financial institutions operate with a fairly straightforward business model: they lend money and borrowers repay it. “Payments is a really important part of our business,” said Smith. “We lend people money to procure vehicles and then we really, really like it when they pay us back!” Smith noted that modernizing their payments platform was critical to addressing service-level challenges and supporting scalability that existed with their incumbent provider.

PayNearMe’s Kaplan highlighted the broader implications of modernizing payment systems. “When payments go right, they are frankly really easy,” said Kaplan. “It’s when they go wrong that you need a modern platform and modern systems to address those things and drive the extra costs out of it.”

The motivation behind Santander Consumer’s decision to overhaul their payments technology was clear: outdated systems were creating inefficiencies, service disruptions, and unnecessary costs. As Smith explained, “When outages occur with a payment provider, it’s a big problem because customers can’t pay us. Reliability and stability in a payments platform are absolutely critical.”

A High-Risk Decision

Service-level challenges and stability issues prompted the company to evaluate opportunities to make a change with their payments provider. In addition, as a contract neared its end, Santander Consumer saw an opportunity to reassess its existing provider and consider whether to renegotiate or look at alternatives. Finally, the company asked whether the current platform and strategy could expand, improve efficiency, and better service customers. If not, it was time to consider a change.

“All those things coalesced together as I was introduced to PayNearMe,” said Smith. “We started evaluating their capabilities and looking at the stack and the architecture that they provided.”

Transitioning to a new payments platform is no small feat, particularly for a large organization like Santander Consumer. “These projects are high-risk,” acknowledged Smith. “Success requires a clear vision, the right partner, and active executive sponsorship. It’s not enough to just approve the project; leaders must stay engaged and work closely with teams to address challenges in real time.”

Wester praised Santander Consumer’s approach. “Many financial institutions struggle with modernization because they view technology as an ancillary function rather than a driver of business efficiency. Santander Consumer’s focus on aligning technology with business outcomes is a model for success,” said Wester.

“You need to be able to step up and drive transformation in your organization, and not fear the hurdles that you have to jump over,” added Smith.

Total Cost of Acceptance

For forward-thinking organizations like Santander Consumer, considering the total cost of acceptance—not just transaction fees—can transform their approach to payments. As Kaplan explains, the goal should be to address all costs associated with payment acceptance, including system costs, manual interventions, and exceptions from failed or delayed payments.

“It’s not just reducing the cost of an individual transaction, but really, the whole ecosystem becomes more efficient the more you take manual effort and touch points out of the process,” said Smith. By partnering with PayNearMe, Santander Consumer streamlined workflows, reduced exceptions, and improved overall efficiency, delivering both cost savings and a better customer experience.

The Role of Self-Service

One of the standout features of the modernization effort was the emphasis on self-service capabilities for both Santander Consumer’s customers and employees. With PayNearMe’s help, Santander Consumer introduced a feature that allows them to send personalized payment links directly to customers’ mobile devices, enabling one-click payments. This eliminated the need for the company to contact a subset of their customers.

“We saw thousands of people adopt that new capability,” said Smith. “Otherwise, we would have had to phone them up, track them down, get them to answer their phone in the first place, and guide them into making a payment.” This capability not only enhanced the customer experience but also freed up internal resources to focus on more strategic priorities.

Measuring Success

Santander Consumer measures success across multiple dimensions, including customer adoption of new payment methods and channels, such as Google Pay, Apple Pay, PayPal and Venmo. The team also monitors service levels to ensure stability and scalability, while tracking operational efficiency gains in back-office functions such as reconciliations and reporting. Ultimately, success is defined by enhancing capabilities, reducing costs, and managing risk effectively–ensuring the modernization delivers long-term value.

Smith’s advice for organizations considering a similar journey was clear: “Don’t start a project like this without the right partner and active executive involvement. It’s a long and complex process, but with close collaboration and a clear vision, the results are well worth the effort.”

As payments technology continues to evolve, Santander Consumer’s success demonstrates the benefit of modernization—not just as a technical upgrade, but as an enabler for long-term value.

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