Running the Race for Remittance Market Share: Paypal Launches Xoom’s Mobile App in Canada

For years since migrants and overseas workers had sailed or flown to seek the proverbial greener pasture elsewhere in the world, the remittance market had never been as busy and players as keen on cornering larger chunks of the business. And why not? And who wouldn’t? Global money transfer is worth US$600 billion annually, with the top three (3) countries generating some $166 billion US dollars.  India estimated to be at US$72 billion, China, US$64 billion, and the Philippines, US$30 billion. (World Bank April 2018 report on “Migration and Remittances)

The race continues to heat up and the good news about the race is that players invest a lot of time, effort, and of course, money, to make the service as efficient as can be. Today, such improvement is made possible with the smartest use of digital technology to keep up with the changing face of the consumers and their demands for speed, reliability and other value-driven features for a service product like money remittance or global money transfer.

I know the banks’ remittance business like the back of my hand, having helped steer a big bank to a triple-peat as top remittance bank and on to a Hall of Fame award.  For years before my own migrant’s story, I have met and engaged with remitters from Europe, Asia, and North America. From these encounters, I have learned that there are at least four  (4) critical factors that remitters look for in this service: trustworthiness, accessibility, cost, and speed; in that order.

Trust is the name or the brand that delivers the service. Implying reliability, trust is also assurance that money will be delivered, period.  Accessibility implies that the sender will go to a brick-and-mortar location or use an electronic facility that is most convenient to him. And then the cost. With money sent representing hard-earned money, every remitter literally wants the best value for every dollar sent. Cost means the highest foreign exchange rate and the lowest fees.

Speed should be a promise that the money will be delivered; not at the shortest possible time all the time, but that the money will at least arrive just on time to meet the need. Remitters somehow also get to decide on the speed factor by planning ahead when to send the money or what facility to use when it is an emergency situation.

Speed may not necessarily be the number one factor but with all other factors being equal, it can still be the clincher in the whole process. This process will not make any sense if the money does not get on time, all the time. Whichever brand promises the cheetah speed and flavors it with a very advanced technology stand to get a good chance at the remittance race.

Xoom, A PayPal Service

PayPal Company puts its seal of guarantee on speed, with the launch of its global money transfer service in Canada, Xoom, even as it races with the other players in the remittance market.

Xoom has been in the business of electronic money transfer since 2001. It is based in San Francisco and today delivers money electronically to more than 130,000 countries all over the globe. Eighteen years ago, Xoom technology might have been way advanced in the minds of remitters who were happy and content with the traditional methods offered by banks and other remittance companies.

But this is not what PayPal thought by 2015. PayPal acquired Xoom in 2015 to expand its digital payment business after its spin-off from eBay in the same year.

2018, Xoom by PayPal launches in Canada to manifest its desire “To democratize the movement of money and make it accessible,” says Mr. Julian King, PayPal Vice President and General Manager of Xoom in Canada.

In his talk, Mr. King assures that Xoom, “will make sending money back home faster, easier, and more cost-effective for Canadian immigrants.”

To put a face to its commitment to speed, PayPal company has commissioned the services of this generation’s most revered marathon man, Usain Bolt, as the celebrity endorser for its “Money Go Xoom” marketing campaign that recently came out in Canada and USA. Jamaica’s Bolt, who is tagged as the world’s fastest man, has become an iconic symbol of speed as he amazes millions of fans around the world with his performances in the world Olympics.

As fast as Bolt, Xoom service can be accessed by simply downloading  Xoom’s mobile app on Android and IOS or go to Xoom.com. If one is an active user of PayPal, he can use his login credentials to access Xoom’s services.

On another aspect, while remittance fees vary depending from which part of the globe one is remitting and to what country, Xoom also thinks that their fees are still pretty much competitive at the range of $1.99-$4.99 per transaction. The foreign exchange rate is said to be carefully watched, too. And with money always a sensitive issue to anyone and assurances of money being actually delivered or that there is someone to talk to should there be any problem –  is a matter equally important to a customer. This is the reason why  Xoom has a very customer-centric call center service where remitters can talk to agents who speak in different languages, including French, with the launch of Xoom in Canada. Additionally, still as part of its customer-driven campaign, Xoom will reward an existing customer with a $20 Amazon gift card for every referral who will avail of the Xoom service.

The Canadian Remittance Market

Mr. King also presented a Canadian picture of the remittance market citing that out of its total population of 36.29 million, 22% are immigrants. He noted that the Canadian remittance market is worth about $24 billion as of last year’s estimate.

Statistics also showed that immigrants from India and the Philippines in Canada send monthly or 5x a year to their beneficiaries, while the Chinese, from 5x to once a year. To these immigrants, sending money is relatively viewed like “a social contract or commitment to families back home,” King added.

It is not uncommon that a lot of immigrants work 2-3 jobs at a time to be able to earn enough for himself, his family, and his extended family back to home countries. As such, time is of the essence.  They practically have no time in their hands to waste and thus, any time-consuming activity like having to go and worry about a money remittance can be stressful. This is part of the reality that every global money transfer company probably needs to keep at the back of their minds as they go about rendering remittance service.

Aptly, the speed and convenience of Xoom brings this PayPal service toe-toe with competition today. But the vigil continues as every player in this competition pledges to keep the marathon lanes open for the run as the remittance business continues to grow year after year.