SAN FRANCISCO—Users of PayPal’s overseas money transfer app Xoom will pay no fees if they use the company’s stablecoin, PYUSD, for the transfers, according to a new report.
“The move is a way for PayPal to build out its share of the international remittance market, where it trails market leader Wise, and to expand the use case for PYUSD, which it launched last year,” Fortune stated.
In an interview with Fortune, PayPal SVP Jose Fernandez da Ponte said Xoom senders will pay none of the customary fees—which average 2% across the industry—while the recipients will receive the funds in their local currency as usual.
About the Service
Xoom provides services in 160 countries and has a network of more than 350,000 cash pickup locations. While Xoom will eliminate transaction fees for PYUSD transfers, users will still pay in the form of the customary foreign exchange spread, according to Fortune.
“For mainstream adoption of digital currencies, you need two things—frictionless experience for consumers and merchants, and a reason to use them. That can be either convenience or financial incentives,” Fernandez da Ponte said.
A Blockchain Token
“PayPal’s PYUSD, like other stablecoins, is a blockchain token that is backed by reserves and designed to maintain a peg to the U.S. dollar,” Fortune explained in its analysis. “While stablecoins are primarily used in crypto markets, Fernandez da Ponte and others view them as a means of transferring money that is faster and more efficient than conventional fiat currency network.
“The stablecoin industry is currently dominated by market leaders Tether and Circle, whose USTD and USDC command a market cap of around $100 billion and $30 billion, respectively, while PayPal is currently seventh-biggest at around $225 million,” Fortune continued.
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