Xoom adds direct domestic transfers to bank accounts, debit cards
Xoom, PayPal’s international remittance unit, has launched a direct money transfer feature for its U.S. customers to send funds domestically to bank accounts and debit cards.
The new functionality builds on last year’s launch of Xoom’s domestic person-to-person money transfer service that was created through a partnership with Walmart and Ria. In that domestic launch, cash could be picked up only in-person at a Walmart or Ria store.
The new feature allows users to send money transfers online or through the Xoom mobile app directly to a recipient’s eligible bank account or their debit card. It also follows the consumer shift to digital adoption for money transfers over in-person at money transfer stores — a trend that the COVID-19 pandemic has accelerated.
“This new service is in addition to what we offer with PayPal and Venmo,” said Julian King, vice president and general manager of Xoom. “With PayPal, you can send money to someone’s PayPal account. Likewise, with Venmo, you send money to someone’s Venmo account whereas with this new offering—people in the U.S. can now send money directly to a recipient’s eligible bank account or debit card. This service also offers a faster and more secure way to send money compared to traditional cash pick-up services.”
Currently, more than a third of Xoom users in the U.S. send money to family and friends domestically at least once a month. The move by PayPal is an attempt to capitalize on this opportunity and stave off competitive threats by the two major remittance giants, Western Union and MoneyGram, which also offer a domestic money transfer service with the direct to bank account (Western Union) or debit card (MoneyGram) feature.
As a measure of the shift to digital money transfers, both internationally and domestically, one only needs to look at how it has affected Western Union. As Western Union stores were mostly closed or operated on restricted hours during the height of the pandemic many of Western Union’s customers flocked to digital services of its own and those of its competitors.
“We launched a U.S. domestic cash-pick up service across 5,000 physical locations,” noted King. “But then the pandemic hit in March. That encouraged us to think how we could enable a way for Americans to support their loved ones during this tough year of socio-economic crisis. This gave birth to our new service which allows our customers in the U.S. to send money directly to a recipient’s eligible bank account or debit card.”
According to the PaymentsSource Future of Money survey published this month, the COVID-19 pandemic has led more consumers across all age groups to use digital domestic money transfer services more often. It’s also led a number of consumers who had never used such a service to start using it.