PayPal’s Remittance Arm Xoom Enables Low-Fee Wallet Transfers Across Africa

PayPal’s money transfer arm Xoom is now offering customers in the U.S., U.K., Canada and Europe the ability to send secure funds to 12 countries in Africa for a reduced fee. 

“Sending money to Africa through traditional channels has always been expensive. We wanted to help bring down the cost and speed up the process to boost financial inclusion,” Xoom Vice President and General Manager Julian King said in a press release on Wednesday (Dec. 9). “There is nowhere else in the world that moves more money on mobile phones than Sub-Saharan Africa.” 

Although last year there were just five bank locations per 100,000 people in Sub-Saharan Africa, there are more than 1 billion registered mobile money accounts, King added, citing data from GSMA and IMF. 

Using Xoom, people can send money to select countries in Africa with transaction fees of 2 to 4 percent. Comparatively, the money transfer fee using traditional channels averaged about 9 percent in 2018, the release said, citing data from World Bank Group.

People can use Xoom for mobile money transfers in Burundi, Cameroon, Ghana, Kenya, Madagascar, Malawi, Mozambique, Rwanda, Tanzania, Uganda, Zambia and Zimbabwe. The company is planning to roll out into more markets next year.

Mobile money tools help drive financial inclusion in emerging markets and can also help advance economic expansion, according to the release. 

A pioneer in digital remittances, Xoom was acquired by PayPal in 2015 for $890 million in an all-cash deal at $25 per share. It operates independently under the PayPal umbrella of companies.

PayPal announced in July that Xoom was being rolled in in the U.K. and 31 markets across Europe. King told PYMNTS that Xoom’s market segment was underserved. The companies both now have a “great deal of trust” from customers, he said.

Last month, PayPal expanded Xoom’s capabilities to enable U.S. customers to transfer funds instantly to individual bank accounts. More than one-third of Xoom customers already use the service in the U.S.

The companies also partnered with Walmart and Ria to facilitate international money transfers at 5,000 U.S. locations.