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- PayPal is considering selling its cross-border payments unit, Xoom.
- The move is likely linked to Elliot Management, which acquired a stake in the payments giant in 2022.
PayPal is considering selling its cross-border payments unit, Xoom. Information acquired from unnamed sources indicated that the payments giant has hired Goldman Sachs to assist with the process. PayPal acquired the platform in 2015 for close to a billion dollars.
Xoom’s probable sale
PayPal is said to have been working on the sale of Xoom for months now. While the payments giant is yet to comment on the news, the move is likely linked to Elliot Management, which acquired a stake in PayPal in 2022.
Besides, news over the probable sale of Xoom comes a week after the release of PayPal’s Q1’23 earnings report. On the one hand, the payments giant indicated that its revenue growth for the year’s first quarter exceeded its target. Its peer-to-peer (P2P) total payments volume increased by 2%. Indeed, TPV from Xoom, Venmo, and PayPal accounted for 26% of the TPV. At the same time, cross-border TPV accounted for 13% of the TPV, down from 2022’s 14%.
Even so, its shares were still under pressure as the firm predicted that its adjusted operating margin will likely not grow at the same rate as previously predicted. It forecasts an expansion of 100 basis points in 2023; a decline from its prior prediction of 125 basis points.
About four months ago, Xoom partnered with Visa to enable customers within the US to send funds in real time to eligible Visa debit cards in 25 countries. Expansion of the Debit Card Deposit feature was geared towards facilitating cross-border remittances in a convenient, cheap, and fast manner.
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