PayPal Set To Acquire Xoom For $890 MillionPayPal Holdings

 PayPal Holdings Inc recently announced that it plans to acquire Xoom Corp for $890 million. Xoom is an online money-transfer company that was started in 2001 and reported sales of $159 million in 2014. PayPal has agreed to complete the acquisition of Xoom Corp by offering an all cash payment that Xoom has accepted.Xoom has a specialized online payment service that allows individuals to send and receive money internationally, as well as pay their utility bills. The company has a robust mobile platform and most of Xoom’s users rely on their smartphones to send and receive money. The company charges a fee that is generally between $5 and $10 depending on the amount of money transferred. Xoom also profits from the difference in cross currency exchange rates.

PayPal follows a similar business model but most of PayPal transactions are done online and the company is looking to establish a strong mobile platform customer base. PayPal currently has around 165 active users and one out of every three transactions done via PayPal are on a mobile platform. The acquisition of Xoom will enable PayPal to immediately establish a strong presence in the mobile payment market and increase its global customer base.

In a statement, PayPal’ CEO Dan Schulman said “I can see us having more mobile transactions than we do through desktop. I believe remittances are ripe for disruption. Among our customers, there is a tremendous desire to send money internationally.” The acquisition is expected to be completed in the coming weeks.