In a bid to make international payment services cost-effective, PayPal is launching its international money transfer service Xoom in thirty-two countries across Europe.
PayPal acquired Xoom on July 1, 2015, and extended the company’s service to Canada in addition to the U.S.
Residents within these countries will be able to transfer funds to 130 different international markets. PayPal has, however, restricted people residing outside the Eurozone from transferring funds back into Europe.
Xoom: PayPal to Increase Its Market Presence?
According to PayPal, money transferred through the Xoom service will be deposited into the recipient’s account by the following day. This transaction will take place with lower transfer fees than its main payments portal. The transfer fees for intra-Europe transactions will be pegged at approximately $4, while transcontinental transfers will be subject to a higher transfer fee of approximately $9.
In its quest to facilitate global money transfers, Xoom has entered into alliances with several banks and major financial institutions such as Itau Unibanco, one of Latin America’s largest financial conglomerates. Through the Xoom service, users will now be able to transfer funds internationally, up to a maximum limit of 8,800 GBP.
One of PayPal’s primary reasons behind the acquisition of Xoom in 2015 was to increase its market presence in the $689 billion global remittance industry. With Xoom’s cost-effective fund transfer policy, PayPal is rivaling other global money remittance services such as TransferWise and MoneyGram.
Blockchain-Based Money Transfer Services: A Long-Term PayPal Rival?
PayPal’s new venture in Europe, however, faces stiff competition from rival blockchain-based money transfer services such as Ripple. The relative speed, ease, and flexibility that comes with cryptocurrency-based payments have motivated major banking institutions such as Banco Santander to embrace blockchain technology.
Blockchain-based money transfer services are enabling financial institutions to transfer funds more easily, while still guaranteeing security and cost-effectiveness. Ripple, for instance, connects banks from across the globe on its network to facilitate greater interaction among banks and ensure cost-effective transfers.
Blockchain technology allows for greater efficiency with regards to money transfers as opposed to traditional transfer services. Ripple can complete roughly thousands of transactions in a single second, while Visa can do even more.
With the popularity of blockchain technology on a consistent rise, do you think this venture by PayPal will be successful in Europe? Let us know your thoughts in the comments below.