PayPal is forcing its way into the booming market for international remittances with a proposed $890 million acquisition of money transfer startup Xoom.
Xoom enables customers in the US to send money to, and pay bills for, family and friends around the world using their mobile phones, tablets or computers. During the 12 months ended 31 March, 2015, Xoom’s more than 1.3 million active customers sent approximately $7 billion via the San Francisco-based firm.
Dan Schulman, president of PayPal, says: “Expanding into international money transfer and remittances aligns with our strategic vision to democratise the movement and management of money. Acquiring Xoom allows PayPal to offer a broader range of services to our global customer base, increase customer engagement and enter an important and growing adjacent marketplace. Xoom’s presence in 37 countries - in particular, Mexico, India, the Philippines, China and Brazil - will help us accelerate our expansion in these important markets.”
Upon closing, Xoom will operate as a separate service within PayPal. The acquisition is expected to close in the fourth quarter of 2015, subject to Xoom stockholder approval and the receipt of consents relating to the firm’s money transmitter licenses.