Dive Brief:
- PayPal is buying international money transfer service Xoom Corp. for $890 million in cash, or $25 per share.
- Xoom allows people to transfer up to $3,000 to 37 countries including Canada and Mexico.
- Currently dominated by Western Union, the international money transfer market is estimated at $600 billion.
Dive Insight:
PayPal is acquiring purchase Xoom for $25 per share, or an estimated $890 million. The move will put PayPal—which is set to separate from parent company eBay this month—in direct competition with Western Union in the person-to-person international money transfer market. It also comes at a time when speculation around a PayPal acquisition post-split abounds.
Xoom allows users to send up to $3,000 to recipients in 37 countries worldwide using a mobile phone, tablet or computer. About 1.3 people used the service to transfer $7 billion in the four quarters ending March 31, of whom 90% are repeat customers and 60% sent money via mobile.