New competition is showing up at the horizon of payment service providers. Because after Ripple has received pressure in recent weeks from various sides (banking consortium, VISA), there is now another player on the market: Xoom – presented and launched by PayPal. With the new offer PayPay wants to score points in the European market.
PayPal Xoom: Fast and Affordable International Transfers
PayPal has launched its mobile payment app Xoom across Europe to enable fast and cost-effective international transfers. The new offer is expected to be well received as it is cheaper than traditional payment services and at the same time more convenient.
Let’s take a brief look at the dimension and target audience of Xoom. The app will allow residents of 32 European countries to send money to people in more than 130 countries worldwide, but sending money back will be impossible if recipients are not from one of the 32 countries. In this respect, Xoom will probably be used by the majority for sending money from Europe to third countries.
To facilitate and simplify money transfers, Xoom has partnered with major banks and other financial services providers. Customers can transfer up to £ 8,800 ($ 11,029) per transaction.
Interesting fact: the mobile payment app offers cash transfers at lower fees than the main platform PayPal. According to the official website, transfers on Xoom cost about $ 4 in Europe and $ 9 in non-EU countries.
Xoom is far from being a “ripple killer”
With the introduction of the new service under the brand Xoom, PayPal is putting itself in the league of international money transfer providers such as TransferWise and MoneyGram, which charge similarly high fees between $ 5-12 and $ 4-10.
It also uses Xoom against blockchain-based rivals like Ripple. However, if Xoom wants to compete (seriously and in the long run) with such players as Ripple, it has to accelerate transactions and processes and significantly lower the price per transaction. Because transactions over Ripple take less than a minute – provided that the Wallet addresses are the right ones – and cost only a few cents. One of the reasons Ripple has been scoring through new partnerships lately.
For example, Europe’s third largest bank, Banco Santander, uses xCurrent (but not XRP!) Ripple technology to facilitate cross-border payments with its One Pay FX app. On this platform, users will be able to make money transfers free of charge on the same day. If you’d like to know more about Ripple’s current status and plans for the future, check out our report on Ripple CEO Brad Garlinghouse.
So it remains to be seen whether PayPal with Xoom really represents an alternative to Ripple. By deliberately renouncing Blockchain, Xoom is more like “yesterday’s news” as cynical tongues would say.
Do you think that PayPal can establish an alternative to ripple with Xoom? Do you see a serious threat and Xoom as a potential ripple killer? Share your comments with us below!