Paypal enters the African market with Xoom

Must Read

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

Owo Arugbo: Ekiti Begins N20,000 Payment To The Elderly As Monthly Stipend For Social Security Scheme

Ekiti State Governor, Dr Kayode Fayemi on Wednesday re-launched the social security Scheme for elderly citizens in the state with,...

PZ Cussons commences entries for Cussons Baby Moments’ 6th season

PZ Cussons has announced the commencement of entries of the 6th season of its eponymous baby competition in Nigeria tagged...
- Advertisement -

A new competitor enters the crowded African money transfer market.

- Advertisement -

Xoom, the money transfer company bought in 2015 for $890m by the American leader in online payments, Paypal, now serves 33 African countries from about 30 European markets.

  • Through partnerships with Ria Money Transfer and African banks, Xoom allows people to send money online to 150,000 withdrawal points in Africa or to transfer funds directly to bank accounts—for now, the latter is only available in Egypt, Morocco, Nigeria, Nigeria, Rwanda, South Africa and Uganda.
  • Recipients can retrieve cash almost instantly; it can be delivered directly to their door or their phone in the form of mobile credit (this is only available 11 countries).

“We offer a safer service and a more affordable price,” says Julian King, vice- president of Xoom.

The transfer company states it costs €1.49 (or 0.3%) to send €500 from France to Morocco. TransferWise and MoneyGram charge €9 and €3.99 respectively for the same amount.

Read:  WorldRemit raises $175m in Series D funding

However, neither the option for bill payment nor cash delivery is available in African countries, although these services are marketed by Xoom.

A market that is competitive and dynamic

Rather than revolutionising the sector, Paypal’s subsidiary appears to be another competitive player in an already competitive and dynamic market.

  • One of Xoom’s biggest competitors and predecessors is the British company WorldRemit, created in 2010 and which is expanding services and partnerships in Africa. Since September 2018, it has allowed inter-African transfers to companies.
  • In June, the company expanded its services to include wage payments in Ghana, Kenya and South Africa. In mid-July, it joined forces with Cash Plus in Morocco, where it now has 2,000 withdrawal points.
Read:  Cross Border Payment Fintech Organization Chipper Cash Extends To Nigeria

Telecoms operators, such as Orange and Safaricom, are also venturing into the inter-African transfer segment, with offers sometimes better adapted to local needs. Safaricom’s Text and Treatment solution allow, for example, to pay for emergency transport for patients in Tanzania and Lesotho.

Read:  Cross Border Payment Fintech Organization Chipper Cash Extends To Nigeria

Missing a strategy on inter-African transfers

Surprisingly, Xoom and PayPal do not seem to have a specific continental strategy.

Paypal’s headquarters in California refused to provide precise figures on its African presence and activity.

When asked about the possibility of transferring foreign currency between countries on the continent in the medium term, King remains evasive: “We will look closely at how we can bring value outside North America and Europe. We hope to be able to offer something within the inter-African markets.”

Bottom line: This is astonishing caution, given that 80% of African migration takes place on the continent and that the sub-Saharan region alone represents an estimated market of $46bn dollars for the sector.

This article first appeared in Jeune Afrique.

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

Ensurity Technologies joins the Microsoft Intelligent Security Association

HYDERABAD, INDIA - Media OutReach - 17 October 2019 - Ensurity Technologies, Hyderabad, India-based cybersecurity company, is pleased to announce that it has joined the...

Hospitality Disruptor Generator Acquires Freehand Hotels In Its Quest to Dominate the Experience Economy in U.S. Market

London-based Queensgate Investments finalizes $400 million purchase of Freehand Hotels from a seller consortium including The Yucaipa Companies and Sydell Group, drastically expanding Generator’s...

FG mulls new tax on Coke, Bigi, other soft drinks

Zainab Ahmed, the minister of finance, says the federal government is considering introducing excise duty on carbonated drinks. The minister made this known while addressing...

“Best Global Brands 2019” – Mercedes-Benz is once again the world’s most valuable luxury car brand

Mercedes-Benz further increased its brand value and is once again the world's most valuable luxury automotive brand. In the latest "Best Global Brands 2019"...

More Articles Like This