When PayPal acquired global money transfer firm Xoom in 2015, company President and CEO John Kunze noted that becoming part of the larger PayPal organization marked the start of a new chapter in the life of the firm. Xoom’s mission to make international funds transfer easy and digital — and to do it at scale — was a natural fit with PayPal’s broader vision of democratizing financial services for the 250-million plus customer base it serves.
“Being part of a larger, global organization will help us deliver the best possible experience to our customers, help accelerate our time-to-market in unserved geographies and expand the ways we can innovate for customers,” Kunze noted.
And Xoom has, by the numbers, taken that mandate pretty seriously in the three intervening years.
Between 2015 and 2017 active users of Xoom’s services increased by more than 30 percent, transactions per month increased 50 percent and usage of its bill-pay service has more than doubled. In April of this year Xoom partnered with Euronet Worldwide subsidiary Ria to offer Xoom customers cash pickup services at more than 150,000 of Ria’s international network locations. As 2018 nears an end, Xoom’s U.S. senders can send funds to 130 global markets — up from 38 at the time of its acquisition.
Today (Dec. 11), Xoom announces its next major milestone: expanding its send-side market to include Canada. Canadians can now use Xoom to send money, pay bills or reload phones fast to the 130 countries Xoom serves.
“[Money transfer] is a particularly important service here in Canada where so much of the population is foreign born,” Xoom Vice President and General Manager Julian King told PYMNTS' Karen Webster in an interview on the eve of the releasing the news. Of the 36 million Canadians, 7.5 million are foreign born — in bigger cities like Toronto, that number can be one in every two citizens.
Canada, in total, represents $24 billion of a $600 billion annual global remittance market that is growing.
More than that, King noted, it’s an increasingly relevant service to consumers all over the globe, particularly as money is becoming increasingly digital in all corners of it.
The Changing Remittances Field
Xoom’s Canadian customers can send up to $12,500 CAD in a single transaction — though King noted the firm expects to expand that cap to match the $25,000CAD U.S. customers can send in a single transaction to a consumer’s bank account or for cash pickup at a RIA agent location. Users can choose from a range of options for receiving those funds, and then track their journey via text updates, email notifications or directly from the Xoom mobile app and website.
The optionality, King told Webster, and making sure funds are digitally sent and then received through a variety of channels is particularly important, because of the diversity of the global payment landscape.
“The key to money transfer is building to deliver what the receiver desires,” King said. “We’re seeing a shift to people sending funds directly to bank accounts — so we have worked to integrate with the biggest banks in our top receive countries in order to offer fast-to-instant delivery wherever possible. But the Ria partnership is a reflection of the fact that some people aren’t banked in developing markets — and we need a product solution for that as well.”
And beyond that he said, remittances as a global field is increasingly becoming about more than simply sending and receiving funds across borders.
For some segments of its user population, he noted, Xoom sees a lot of single-service use — users do one thing with the platform and only that one thing. But King said that’s increasingly becoming the exception as a “material fraction of the base” are users taking advantage of the full set of services.
“That why it is so important to create the full offering — that where the stickiness and strong retention is.”
Remittances are a big and important business all over the world, King noted. You can see that in the massive receive markets like the Philippines, India and China — or even in smaller receive markets like his home nation of Jamaica where remittances represent 17 percent of GDP. And those funds, he said, are being sent to pay bills, cover emergencies, celebrate holidays and life milestones and fund investment accounts.
“We are past the days asking will remittances ever be a digital business. The digital [money transfer] business is now the necessary end game that it takes to operate at global scale,” King told Webster.
And while King says team Xoom believes that ultimately digital is the most secure way to go, certainly more than cash, maintaining that security while at the same time investing in the systems to securely move funds instantly all over the world with minimal cost or effort for users will always be an ongoing effort.
Keeping fraud in check requires the dedicated effort of a full 25 percent of Xoom’s workforce.
As Xoom looks to 2019, King said that there are two big priorities. The first, he noted, is expanding the number of send markets.
“Canada is the first stop, be we're expecting to move into places like Europe soon,” he noted.
The second, and the firm's ongoing priority (as exemplified by its name) is speed — and finding ever faster and more secure ways to get funds faster.
“We have yet to meet a customer who wants their money later, as opposed to now.”
Which, he noted, is why along with today's announcement about the Canadian expansion, Xoom is announcing a new spokesperson: Olympic gold medal and world record-holder for sprinting, Usain Bolt.
“We are fast and it is our mission to be fast,” King said. “We can think of no better brand ambassador than the fastest man in the world.”