PayPal intends to launch its mobile remittance service, Xoom, in Australia soon, it is reported, in what would be only its second country for outbound remittances after the US.
A report by Reuters, which spoke with a senior executive from the payments firm, said Australia is a popular market thanks to a large migrant population. Inhabitants have links back to numerous countries and regions, including China, India, Southeast Asia and Africa.
However, Australia’s leading banks have closed the accounts of international money transfer businesses, amidst fears about compliance with government rules on money laundering and terrorist funding, thus leaving the market underserved.
Customers can use their bank accounts to transfer money overseas, but that’s a relatively expensive approach compared to using a remittance app, such as Xoom.
PayPal users cannot at present transfer funds directly into their Xoom account, although that is likely part of integration plans. PayPal acquired the mobile remittance firm last summer for nearly $900 million.
John Kunze, vice president of Xoom, said while scale was a significant advantage for PayPal, it came with a “mandate to run compliance, consumer protection and a safe business”.
“So we have to keep moving the ball forward on this as we grow,” he said.
Separately, the same executive blogged last week that Xoom is set to add 13 more countries for receiving remittances, bringing the total to 53 countries.