PayPal has announced the acquisition of digital money transfer startup Xoom in a bid to help it grow its global payments business.
The company is currently unable to offer international remittance payments, but integrating Xoom's technology will make it possible to make sending money abroad and receiving money from overseas a faster, cheaper and more secure process.
Dan Schulman, president and CEO designee at PayPal said: 'We believe this acquisition will allow PayPal to quickly expand into the large and growing global money transfer market.
"The acquisition aligns with our strategic vision to make the movement and management of money better for people, helping our customers find new and exciting ways to use PayPal, everyday."
Xoom already has 1.3 million customers in the US, helping them send money and pay bills in 37 other countries around the world. Between April 2014 and March 2015, it allowed $7 billion (4.4billion) worth of payments to be processed, with the majority sent using mobile devices.
Schulman continued: "This deal brings significant expected benefits to both PayPal and Xoom. For PayPal, acquiring Xoom will allow us to offer more services to our global customer base and help accelerate our expansion in key international geographies, including Mexico, India, the Philippines, China and Brazil".
"For Xoom, joining PayPal will help increase how quickly it can expand into new markets and accelerate the ways the company can innovate for customers. PayPal will also help Xoom grow by offering Xoom's services to our 68 million active US customers," he said.
The acquisition is expected to close by the end of this year and Xoom will act as a separate service from within PayPal, with staff moving across to the online payments company.
Image credit: Sagar Savla
