- Xoom, PayPal’s cross-border money transfer service, now enables U.S. users to fund transfers abroad using USD converted from PayPal USD.
- The new funding option will achieve two objectives: create a stable value to maximize user confidence and ensure utility for payments and commerce.
PayPal Expands International Transfer Options
Global payment giant PayPal expands international transfer options by allowing PayPal USD (PYUSD) stablecoin to USD conversions.
In an April 4, 2024 statement, PayPal announced that all U.S. users can facilitate money transfers using USD converted from the PYUSD stablecoin.
But, the service won’t be available for residents of Hawaii. The process will utilize its cross-border payment service, Xoom, to facilitate this conversion.
Afterward, users can easily send money to family and friends without being charged transaction fees.
Enabling U.S. users of Xoom the option to fund cross-border money transfers using PYUSD builds on our goal of driving mainstream adoption of cryptocurrencies while offering an easy way to securely send money to friends and family at a lower cost.
Fernandez da Ponte, SVP for Blockchain and Crypto at Paypal, stated.
The move aims to offer a more cost-effective option for sending money abroad. More importantly, allows PayPal to expand the use of its stablecoin, which was launched last year.
It will also establish the payment giant as a trusted digital asset player.
New Funding Option Offers Cheaper Payment Alternative
The new funding option comes at an opportune time when consumers seek cheaper cross-border payment solutions.
Notably, World Bank data shows that the average cost of sending $200 is approximately 6%.
With PayPal providing fee-free transactions for money transfers, it aims to provide a more affordable alternative.
U.S. Xoom users need sufficient PYUSD balance in their PayPal Cryptocurrency Hub to use the new service.
Interestingly, the users then select PYUSD as their funding source when initiating a money transfer. Evidently, the Xoom platform will convert the PYUSD stablecoins to USD currency with no crypto sale fee.
Impressively, the recipients, on the other hand, will receive their funds in the fiat currency chosen by the sender.
What Does This Mean for the Crypto Market?
The Xoom move builds on PayPal’s goal of driving mainstream cryptocurrency adoption. At the same time, it offers an easy and secure way of sending money to friends and family at a lower cost.
Notably, the move is the latest sign of Crypto’s encroachment on international remittances. Market watchers welcome the bold move and are closely monitoring the stablecoin market.
PayPal’s announcement comes at a time when the stablecoin market is heating up. Coincidentally, Ripple also announced on April 4, 2024, that it was launching a stablecoin explicitly designed for enterprise clients.
In its press release, Ripple reiterated that the stablecoin market could rise to $2.8 trillion by 2028.
Currently, Tether’s (USDT) and Circle’s (USDC) stablecoins lead the pack in terms of supply. However, several alternatives have sprung up to compete for the market share.
The PYUSD aims to remove friction for inexperienced payments in virtual environments. It fosters cheaper transfers of value, sending remittances, and carrying out international payments.
Will the new funding option increase global usage of PayPal USD stablecoin?
Suchet Salvesen
Suchet is a Norwegian economist, entrepreneur, and investor, serving as the CFO and COO of Brainfund. With over a decade of experience in global expansion, venture capital, and emerging technologies, he earned his MBA from the NMBU School of Business & Economics. He held dual bachelor's degrees from the University of South-Eastern Norway. His career spans roles at NextToMe, Get, and Conax before joining Everipedia, now Brainfund, in 2017.
