By On July 18, 2019, PayPal launched its mobile payments app ‘’Xoom’’ across Europe to provide reliable international money transfers. With the new service, PayPal intends to provide a cheaper alternative to traditional payment services and offer more convenience than sending crypto.
How it works
Xoom has partnered with major banks and other finance firms to enable the money transfers where customers can transfer up to $11,029 per transaction.
The new payment service will let residents of 32 European countries send money to people in more than 130 countries worldwide. However, the only mishap is that, if those recipients fall outside the 30-odd countries, they will not be able to send that money back.
With Paypal Xoom, users will be able to make fast and convenient next-day money transfers at fees lower than its main payments platform PayPal. The company website states that transfers on Xoom will cost around $4 in Europe and $9 to countries further afield in non-EU countries.
This brings PayPal at par with traditional international money transfer services such as TransferWise and MoneyGram who charge fees between $5-12 and $4-10 respectively. It also sets Xoom against blockchain-based rivals like Ripple.
Can Xoom Compete with Ripple?
The news by Paypal has placed more pressure on Ripple in the market for providing efficient cross-border payments, especially after Visa announced last week that it had launched a new payment network.
Many in the crypto world will likely wonder if PayPal can establish an alternative to ripple other blockchain-based transfer services with its new app Xoom.
The reality is that Xoom is already at a disadvantage for offering next-day transfers, as sending crypto blockchain-based transactions via Ripple takes less than a minute –provided you have the right wallets in place before you initiate the transaction. Sending currency via Ripple also costs cents, which is why it has gained growing popularity with new users.
Ripple has already partnered with Europe’s third-largest bank, Banco Santander, employing xCurrent (but not XRP) 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.
So it is safe to conclude that Paypal with Xoom is far from being a ‘’Ripple Killer’’, as it would have to speed things up and drop the price significantly to offer any sort of notable competition to Ripple. By deliberately rejecting blockchain-based transactions, PayPal’s latest innovation is already yesterday’s news.
The emergence of cryptocurrency has largely accelerated the market for cross-border payments, essentially threatening to disrupt more traditional money transfer services.
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