Dive Brief:
- PayPal made two major plays in Europe this week, expanding its international money transfer service app Xoom and launching a blockchain startup, IDKeep, which helps banks verify digital IDs.
- Xoom is now available in 32 European nations, expanding the company's global reach to 130 markets internationally.
- IDKeep, which was created by Luxembourg-based LuxTrust S.A. and Cambridge Blockchain Inc., is launching its private beta-testing phase in Luxembourg this week.
Dive Insight:
PayPal's expansion of Xoom puts it in direct competition with other leading international money remittance services like MoneyGram and TransferWise, all fighting for a slice of the global remittance market, which totaled $689 billion in 2018, according to the World Bank.
"Even in 2019, it still takes too long to get money from European countries to a loved one in another country," PayPal CEO and President Dan Schulman said in a release. "We know how important these money transfers are in the lives of millions of people, and how crucial it is that money arrives swiftly so it can be used for things that matter."
According to data from the World Bank, the top remittance recipients in 2018 were India with $79 billion, followed by China ($67 billion), Mexico ($36 billion), the Philippines ($34 billion) and Egypt ($29 billion).
PayPal's expansion of Xoom follows several recent acquisitions in the past year, including mobile payments company iZettle and online marketplace payment processor Hyperwallet.
PayPal's connection to IDKeep is a result of its Series A investment in Cambridge Blockchain in April.
"After receiving investments from PayPal, Flourish and Omidyar Network earlier this year, we are pleased to continue our expansion to deliver the future of digital identity for Europe and beyond,” said Matthew Commons, CEO and co-founder of Cambridge Blockchain, which is headquartered in Cambridge, Massachusetts.
IDKeep will launch with 700,000 customers of Luxembourg's six main retail banks, according to American Banker.
In a video announcing the beta-testing, Commons said Europe's strong data privacy rules made it an ideal market to launch IDKeep.
The European Union's General Data Protection Regulation (GDPR) went into effect last year, requiring all companies to gain "explicit consent" for any data collected from European citizens.
Commons called PayPal's investment a sign of IDKeep's future growth in the U.S., as well as Europe.
"Europe has really been a leader in terms of data privacy, and now you're starting to see America catching up, in terms of the California Data Privacy Law and lots of discussion about data privacy at the federal level, as well," he said.
