Less than three weeks before its planned split with eBay, PayPal announced on Wednesday that it is acquiring San Francisco-based digital money transfer provider Xoom for $890 million in an all-cash deal.
PayPal are hoping the move will strengthen its international reach, and allow the company to make headway into to the lucrative friends and family remittances market - Xoom's core business.
Xoom, which has 1.3 million customers and a presence in 37 countries, allows users to transfer money via desktop, mobile phones and tablets. It moved more than $7 billion for its customers over the 12 months preceding last April. The company will operate as a separate service within PayPal after the completion of the deal.
PayPal + Xoom: transforming how people move their money - around the world https://t.co/UfxWLloQ2L--- PayPal (@PayPal) July 1, 2015
PayPal issued this statement regarding the acquisition: "Acquiring Xoom allows PayPal to offer a broader range of services to our global customer base, increase customer engagement and enter an important and growing adjacent marketplace. Xoom's presence in 37 countries - in particular, Mexico, India, the Philippines, China and Brazil - will help us accelerate our expansion in these important markets."
Should it get the okay from regulators and Xoom's investors, the deal is expected to be complete by the end of the year.