What’s Next For An Increasingly Digital Remittances World

21. November 2017.








Two years after being acquired by PayPal, digital money transfer service Xoom has a story that it wants the world to know.

Part of that story is around the typical stats that those keeping score want to know. Like the fact that active users have increased by more than 30 percent and that transactions per month are up more than 50 percent over those two years. And that the usage of its bill pay service has more than doubled over that period of time, and that 75 percent of its transactions are via mobile.

But it’s what that means to the users of Xoom’s service that needs to be the front-and-center story, Julian King, senior VP of marketing and corporate development, told Karen Webster – and it’s what has made the Xoom team the most proud over the course of its decade of providing digital money transfer services.

“What we do is much more than a transaction,” King emphasized. “Everything we do touches people’s lives. It’s the money people are using to eat, to pay for the doctor, to pay the water bill without spending an entire day in line. What we do helps people collectively help their families,” adding that the ability to innovate on behalf of those people means that Xoom can make a big and immediately appreciable difference in their lives.

It’s one of the things that King told Webster drew the Xoom team to PayPal. Xoom’s mission to make international funds transfer easy and digital – and to do it at scale – is a natural fit with PayPal’s broader vision of democratizing financial services.

“What gets us up in the morning is the chance to make [the Xoom] platform available to PayPal’s global network of 200 million users.”

The Enhanced Xoom + PayPal Experience

As part of the PayPal enterprise, King said that Xoom has enhanced their digital money transfer value proposition for senders and receivers worldwide – and at scale. Over the last two years, Xoom has enhanced the function of the network itself, building out its breadth and depth and fully integrating the Xoom stack with PayPal to create a seamless, friction-free consumer experience. Xoom has also expanded the number of receiver countries to 67, adding 12 in 2017 alone. Part of their network enhancements also include two-way flow by enabling a “request money” feature.

Among their more interesting adds, King noted, has been its high-value transfer product, which increases the cap on transactions from $3,000 to $10,000. This capability provides senders with the ability to send direct funds for a variety of larger-ticket purchases, such as tuition for education, medical treatments and down payments on homes and cars. Raising the cap makes it possible for consumers to more easily and quickly move those larger sums of money, and very likely at a lower cost than other available alternatives.

“This was a case where we were able to both better serve our current customer base and extend our base out to customers who may not have considered us in the past because we weren’t able to meet their needs at the higher end of the digital money transfer spectrum,” said King.

The increase to $10K is a starting point, King said, and will likely increase over time.

The Digital Future

Today, Xoom’s three largest corridors of service mirror the three largest immigration channels to the United States: India, Mexico and the Philippines. That one might expect – given a quick looks at what three nations feed the U.S. the largest number of immigrant workers each year.

But for all the things that turn out to be much as expected, King said, there is a good deal more that is far less obvious – because the cross-border transfer market is a very different place than it was a decade, or even five years, ago.

“The primary shift as we see it is that cross-border P2P, the business we are in, is at the starting point of a long secular trend, where we see tremendous portions of the world all going digital,” noted King. “[It depends] on the specific cost structures – some corridors are going to move faster than others – but the value proposition is too strong overall to believe anything but that this is happening.”

That change, he said, is still evolving – as the space, which is very fragmented right now – is going to become a lot more consolidated as the cross-border digital funds transfer game is about to scale.

“The business favors scale, which is why everyone has to drive so hard to get there,” King said. “Absent scale, there’s not a lot to do in this business.”

King pointed out that, with PayPal, the ability to enable scale is just the starting point. It’s not difficult to imagine a world where receiver countries become important digital payments and commerce hubs. The ability for Xoom receivers to move money into their PayPal accounts and transact with local merchants, pay bills and shop online, King said, is an important stepping stone into living an easier and more secure digital life in their home country.

“We think that being able to offer a fuller set of solutions is a good idea,” King told Webster. “I think there is a strong secular tailwind that is moving the entire industry digital – first on the sender side, but increasingly on the receiver side as well.”

Plus, he noted, it’s always nice when a firm can be successful at achieving its main goals of making users’ lives easier.

“If you do right by the customer, we’ve always believed the business will follow. It feels great to see that borne out.”

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