PayPal announced today that it has acquired Xoom, an international money transfer service for $890 million.
Upon acquisition, Xoom will become a separate business within PayPal. With this acquisition PayPal is hoping to expand the breadth of its remittances business with Xoom’s international network, allowing it to tap into markets like Latin America.
“In most of Latin America today, the only way you can take money out of your PayPal account is having a U.S. bank account,” Arnoldo Reyes, PayPal’s head of financial services told Marketplace earlier this year.
Outside of Latin America Xoom operates in 37 countries worldwide and touts 1.3 million customers who, in the last year transferred roughly $7.0 billion. That’s a sliver of PayPal’s business, but Xoon could help make PayPal the money transfer tool of choice in more key markets throughout Asia and other parts of the world.
In 2014, global remittances reached $583 billion, with the majority of those funds reaching developing nations.
PayPal announced the benifits of this acquisition.
Expected Strategic Benefits of the Xoom Acquisition:
- Extends PayPal’s offering to its customers: Broadens PayPal’s consumer offering to its 68 million active U.S. customers by cross-selling Xoom’s services.
- Accelerates time-to-market: Xoom’s proprietary and fast “funds-out” network enables PayPal to enter this growing marketplace with a leading technology solution with strong presence in key international markets.
- Enables expansion into new markets: Allows Xoom to expand its portfolio of send-markets by leveraging PayPal’s wider international network.
- Delivers a strong technology platform: Xoom’s compelling and reliable technology platform and consumer experience are coupled with its excellent customer service.
Xoom is a leading digital money transfer provider that enables consumers to send money, pay bills and send mobile reloads to family and friends around the world in a secure, fast and cost-effective way, using their mobile phone, tablet or computer. During the 12 months ended March 31, 2015, Xoom’s more than 1.3 million active customers sent approximately $7.0 billion with Xoom. The company is headquartered in San Francisco and can be found online at www.xoom.com.