PayPal has completed its previously announced acquisition of Xoom.
Xoom will operate as a separate service within PayPal under the continued leadership of John Kunze, who has joined PayPal’s executive staff and will report to PayPal CEO Dan Schulman.
Xoom is a secure, fast and affordable way to send money to, and pay bills for, family and friends around the world, using a mobile phone, tablet or computer. Beyond its global reach, Xoom has a loyal, mobile-savvy customer base, with 97 percent of its payment volume coming from repeat users and 60 percent of its active users on mobile.
SunTrust Robinson Humphrey analyst Andrew Jeffrey said,
If PayPal closes the transaction as planned, PayPal will suddenly have the best remittance franchise that works globally, as well as the best risk-management technology in the industry for working with banks’ automatic clearinghouses.
PayPal and Xoom are well-positioned to democratize the management and movement of money. By combining PayPal’s global scale with Xoom’s capabilities, the companies plan to create simpler, more secure and faster ways for more people to send and access their money. Through this acquisition, Xoom will help accelerate PayPal’s entrance into the international remittances market, while PayPal will help expand Xoom’s services to more people in more places around the globe.
Since Xoom is already operational in Pakistan, this acquisition could mean Paypal’s entry into the market, albeit in a roundabout way. While it may be too much work setting up a presence from the ground up, acquiring companies that already have the necessary infrastructure and market presence seems to be Paypal’s strategy for capturing the increasingly lucrative markets where it currently isn’t available.
