PayPal recently revealed its plans of acquiring money-transfer company, Xoom Corp (NASDAQ:XOOM). The transaction valued at $890 million will help PayPal in expanding its money-transfer services across the globe by giving more choices to its active customers to send and receive cash around the world through Xoom’s services on their phones and PC’s. The deal is expected to close during the last quarter of 2015.
Incoming CEO at PayPal, Dan Schulman said that Xoom will help the company to speed up its growth in 37 countries in which Xoom operates, particularly the key markets of China, India, Brazil, Mexico and Philippines. Schulman also added that making international payments simpler, secure and affordable is what the company is excited to do for its consumers. PayPal is currently providing international money transferring services in 190 countries and regions.
Xoom, having 1.3 million active consumers in the U.S, also operates in China, UK, Spain and Australia. The company is competing with other money-transfer firms including Moneygram and Western Union. Xoom enables customer to send money overseas or pay bills for approx. $3-$10 per transfer.
PayPal works to maintain its place as a leading company in the competitive area of digital and mobile payments. The company has enjoyed fast progress as more customers have made online purchases in smartphone apps while making use of mobile-payments systems including Apple Pay. PayPal also faces competition from big tech giants including Google, Apple and Amazon, as digital payments have become a point of focus for these firm.
Earlier this year, PayPal acquired a startup, Paydiant that helps companies like Capital One and Subway add mobile payment options and loyalty features into their mobile applications. Back in 2013, PayPal agreed to purchase Braintree in deal valued at $800 million. Braintree is engaged in processing payments for firms such as Uber and Airbnb.
