PayPal has purchased a digital money transfer company. Called Xoom Corporation, the company was purchased for $25 per share, or about $890 million.
Xoom specializes in remittances in the US, and enables customers to transfer money via mobile devices and PCs. PayPal’s acquisition of the company reflects another bit of crafty positioning on that company’s part as it approaches organizational independence from eBay and seeks to establish itself as a major concern in the mobile payments market. In a press release announcing the acquisition, PayPal President Dan Schulman said it “aligns with our strategic vision to democratize the movement and management of money,” adding that “Xoom’s presence in 37 countries – in particular, Mexico, India, the Philippines, China and Brazil – will help us accelerate our expansion in these important markets.”
It’s a particularly prudent move given the apparently enormous untapped potential of the money transfer market, especially as mPayment platforms make the processing of remittances easier than ever before. Just the other day, MTN Group and Ericsson saw the deployment of Ericsson Converged Wallet in Swaziland as part of a larger global effort to enable these kinds of mobile payment services to customers, but they have by no means cornered the market; by jumping into the global money transfer market so early, PayPal has an opportunity to stake out its own market share and strengthen its overall mPayment business strategy.