Dive Brief:
- Digital payments pioneer PayPal is making its cross-border debit deposit services available on a real-time basis, letting U.S. users of its Xoom money transfer service make faster deposits via their Visa debit cards in 25 countries, the company said in a Thursday press release.
- The countries where the speedier deposits can be sent include Great Britain, Guatemala, Hungary, Indonesia, Israel, Italy, Jamaica, Thailand, Ukraine and Vietnam, among others. PayPal plans to expand the new Xoom services to additional countries later this year, the release said.
- “With the Xoom Debit Card Deposit functionality, recipients have access to use those funds typically within minutes,” PayPal said in the release.
Dive Insight:
PayPal’s Xoom has offered money transfer services domestically since 2020 and expanded its cross-border capabilities last year. Now, it’s speeding up the delivery of the payments with an assist from Visa’s real-time system called Visa Direct.
Xoom’s debit card deposit “will enhance cross-border money movement with the real-time payment capabilities offered through Visa Direct,” Yanilsa Gonzalez-Ore, Visa’s head of Visa Direct in North America, said in the release.
PayPal is rolling out the new Xoom feature as the market for cross-border services becomes more competitive, with startups and legacy companies alike increasing their services and features for sending money to family and friends in other countries.
The rise in such remittance services is being egged on by two unfolding developments in the payments world. First, the arrival of real-time payment services in some countries, including a U.S. expansion of such services later this year, is boosting capabilities for sending money faster and cheaper, prompting more competition. Second, the World Bank is conducting a years-long campaign to lower the cost of remittances.
One of the legacy companies upping its game is The Clearing House, which has teamed with the pan-European payments provider EBA Clearing and international payments messaging firm Swift to jump-start a new cross-border instant payments system. The companies said in an October 2022 press release that they completed a proof of concept and began a pilot they hope will become a commercial enterprise this year.
Card stalwart Visa is also increasing its presence in the market for handling remittances, which often involve migrant workers in economically strong countries where they can find jobs and send money home to family and friends in poorer countries. In September, Visa’s chief financial officer explained how that market had become more attractive to the San Francisco-based card network company.
Startups have stampeded into the remittance market, too. In August, the Seattle fintech startup Remitly, which provides digital financial services in 170 countries for cross-border remittances, said it would buy Israeli peer Rewire for $80 million to stretch its services into more countries.
