Another So-Called Ripple Killer Emerges

In what’s being billed as another potential threat to Ripple’s business, PayPal just launched Xoom, an international money transfer service, in 32 markets across Europe.

Customers in the newly serviced countries can now use Xoom to send money to friends and family, pay bills and top up phones in more than 130 markets internationally, according to an announcement from PayPal.

“In 2019, remittance flows to low- and middle-income countries are expected to reach $550 billion, to become their largest source of external financing.

The global average cost of sending $200 remained high, at around 7 percent in the first quarter of 2019, according to the World Bank’s remittance prices worldwide database. With the launch of Xoom, millions of people across Europe including millions of PayPal customers, can now support family members overseas with their medical, education, utility bills, and other financial needs, at affordable costs.”

Customers will be able to send up to €10,000 in a single transaction, and existing PayPal customers can use their PayPal or bank accounts in combination with Xoom’s services.

Says Dan Schulman, PayPal’s CEO and president,

“The way we move and manage our money has changed dramatically in the last few years. We have moved beyond the days when the only option for sending money abroad was to queue at a counter for hours. Even in 2019, it still takes too long to get money from European countries to a loved one in another country.

We know how important these money transfers are in the lives of millions of people, and how crucial it is that money arrives swiftly so it can be used for things that matter. With Xoom, someone with a smartphone on a bus in London, Paris or Berlin can send money that can be accessed quickly in Mumbai, Lagos or Nairobi to pay for a family member’s medical emergency or urgent financial needs.”

Competitors in the remittance market are establishing new infrastructure to revamp the global remittances market. According to the World Bank, global remittances, which include flows to high-income countries, reached $689 billion in 2018, up from $633 billion in 2017.

Xoom joins IBM’s World Wire platform and Facebook’s Libra as new potential threats to Ripple’s cross-border transaction business model designed to transform global remittances. When it comes to Libra specifically, Ripple CEO Brad Garlinghouse says he believes Facebook is adopting an entirely different model by targeting consumers instead of banks and financial institutions.

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