PayPal launches Xoom app, competes with Western Union on speed
While it will not share the percentage of the remittance market which it currently controls in Jamaica, American company PayPal, which owns remittance company Xoom, is not being coy about its desire to increase market share in one of the Caribbean’s largest recipients of money transfers.
PayPal Holdings Inc operates a worldwide online payments system that supports online money transfers. It serves as an electronic alternative to traditional paper methods like cheques and money orders.
The company in early April launched the Xoom app, promising Jamaicans that it was the fastest service available.
The app links to Xoom.com where users can send money, reload phones, and pay bills for family and friends living in Jamaica.
The charge of US$4.99 per US$200 sent appears to be competitive. Western Union quotes rates of US$5 for up to US$200 of remittances.
PayPal claims that Xoom, through its local remittance partners JMMB Money Transfer Limited and Victoria Mutual Building Society, has a larger network than Western Union’s 140 agents. Xoom is in more than 130 countries and has operated in Jamaica for at least 15 years, well ahead of its acquisition by PayPal in 2015.
The Xoom Jamaica website points to 184 cash pickup locations – 106 linked to JMMB Money and 78 to VMBS. But in an update this week, the head of global communications for PayPal, Jaymie Sinlao, told the Financial Gleaner that the local Xoom network now spans 300 collection points.
She also doubled down on the claim of Xoom being the fastest money transfer service.
“Through long-time partnerships with Victoria Mutual and JMMB Money Transfer, cash pickup is typically available within 15 minutes after money is sent,” Sinlao said. To push its message on speedy service, the company now has Olympian Usain Bolt as spokesman.
Jamaica’s remittance market is currently valued at an annual US$2.4 billion, or 16.5 per cent of GDP, with GraceKennedy Money Services, GKMS, seen as the market leader.
GKMS, which operates the Western Union franchise, says it does not see PayPal as a challenge.
“No, GraceKennedy Money Services, sole agent of Western Union in Jamaica, does not at all feel threatened,” said GKMS CEO Grace Burnett when asked how the company viewed the current push for market share by PayPal. Western Union and PayPal are American companies.
GKMS has “a footprint and strategic location placement that is second to none and has, over the past two years, continued to invest in building out digital products and services offerings, which continues to grow our customer base by attracting those digital nomads,” said Burnett. “Western Union remains the global leader in digital money transfer and we are building on those pillars.”
Western Union last year relaunched its WU app, which it says allows customers to start the process of sending a money transfer and then complete the transaction in store within 24 hours. But Xoom claims an accelerated process that takes 15 minutes.
Communications manager Yolande Gyles says GKMS’s direct-to-bank service, which launched around the same time the Xoom app made its debut, would provide remitters and their recipients with equal convenience.
The direct service allows registered customers to have their money transfer sent to most banks across Jamaica, added Burnett.
“And this is in addition to our other digital services like Wu.com, which allows customers to send anywhere in the world using their Jamaican debit or credit cards, and the Western Union app, through which they can start a transaction and finish in store,” she said.
VM Group president and CEO Courtney Campbell says subsidiary VMBS Money Transfer Services Limited has been partnering with Xoom for remittance services for over 15 years.
“In fact, we are their longest worldwide partner,” he said. “The volumes through this partner have been experiencing strong growth due to the convenient online channel and VMBS’s local network of 16 branches and 70 sub-agents.”