PayPal Integrates PYUSD into Xoom for Faster Cross-Border Payments
KEY FACT: PayPal has integrated its U.S. dollar stablecoin, PayPal USD (PYUSD), into its global money transfer service, Xoom, to improve the speed and reduce the cost of cross-border transactions. Utilizing blockchain technology, PYUSD provides a stable and efficient medium for international payments, operating beyond traditional banking hours. Key partnerships with Cebuana Lhuillier in the Philippines and Yellow Card in Africa extend the reach of these services, enabling seamless money transfers across continents. This initiative aims to enhance financial inclusion, particularly in developing regions, by leveraging innovative technologies to provide accessible, affordable digital financial solutions.
Source: PYUSD, Xoom
PayPal Integrates PYUSD into Xoom for Faster Cross-Border Payments
PayPal, a global financial technology (FinTech) company has announced a significant advancement in cross-border financial transactions by integrating its U.S. dollar-denominated stablecoin, PayPal USD (PYUSD), into its international money transfer service, Xoom. This strategic move aims to enhance the speed and reduce the costs associated with global money transfers, particularly benefiting regions such as the Asia-Pacific and Africa. The development was communicated through a press release on November 19.
PayPal announced it will be enabling disbursement partners to use PayPal USD (PYUSD) to settle cross-border money transfers made with Xoom. Cebuana Lhuillier and Yellow Card will be the first Xoom disbursement partners to use PYUSD to settle cross-border money transfers, allowing them to leverage the cost and speed advantages of blockchain technology.
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PYUSD, launched in 2023, is a U.S. dollar-pegged stablecoin issued by Paxos Trust Company, a regulated crypto custodian in the United States. As an ERC-20 token on the Ethereum blockchain, PYUSD is designed to integrate seamlessly with various developers, wallets, and Web3 applications. This integration with Xoom allows PayPal to leverage PYUSD for cross-border transactions, offering users a more efficient and cost-effective payment solution.
The integration of PYUSD into Xoom's operations is set to transform international money transfers. PYUSD leverages blockchain technology to offer a stable and efficient medium for transactions to mitigate the volatility often associated with other cryptocurrencies. This stability ensures that users can transfer funds across borders with greater confidence and predictability.
A key advantage of utilizing PYUSD is the ability to conduct cross-border settlements without the constraints of traditional banking hours. This flexibility facilitates more timely and efficient transactions, addressing a common challenge in international money transfers.
To implement this initiative, PayPal has partnered with Cebuana Lhuillier and Yellow Card, two prominent financial service providers in Asia and Africa, respectively. Cebuana Lhuillier, recognized as the largest micro-financial services provider in the Philippines, operates an extensive network of 3,500 branches and 25,000 partner agent locations nationwide. This vast infrastructure enables Filipinos worldwide to send money back home efficiently. Jean Henri Lhuillier, President and CEO of Cebuana Lhuillier, expressed enthusiasm about the collaboration which he says will enhance financial inclusion and help more Filipinos. He stated:
"PayPal's payment services, our extensive rails with PDAX and Philippine banks, and our vast network of physical touchpoints enable us to deliver to last mile areas that are in need of support."
On his part, Chris Maurice, CEO and Co-Founder of Yellow Card, emphasized the transformative potential of stablecoins like PYUSD in the payments ecosystem, stating that their integration can enhance the efficiency of money transfers through advanced stablecoin and payment infrastructures. In his words:
"We are thrilled to partner with Xoom to support money transfers made by PayPal customers across the African continent and rising world. PayPal understands that stablecoins like PYUSD are changing the payments landscape, and by integrating our technology, they will be able to move money in the most effective way possible thanks to our stablecoin and payments infrastructure."
Jose Fernandez da Ponte, Senior Vice President of Blockchain, Cryptocurrency, and Digital Currencies at PayPal, emphasized the importance of this initiative, stating,
"Cross-border transactions are an important driver for economic growth and prosperity in developing countries. With this step, Xoom and its partners, like Cebuana Lhuillier and Yellow Card, will be able to leverage PayPal's payment technologies and the blockchain to further enable seamless money transfers across borders."
This development is part of PayPal's broader strategy to expand PYUSD's accessibility. Earlier in the year, PayPal partnered with Anchorage Digital to launch a rewards program for clients who custody PYUSD with the crypto custodian. Additionally, in May, PayPal introduced PYUSD on the Solana blockchain, collaborating with platforms like Crypto.com, Phantom, and Paxos to facilitate user onboarding. The company also partnered with Web3 infrastructure provider MoonPay to enable cryptocurrency purchases using PayPal accounts, further extending its reach into the crypto ecosystem.
Despite these advancements, PYUSD's market capitalization remains modest compared to leading stablecoins. According to CoinMarketCap, PYUSD's market cap is approximately $1 billion, while Tether (USDT) and USD Coin (USDC) command market capitalizations of around $128 billion and $37 billion, respectively.
The integration of PYUSD into Xoom's services is poised to drive financial inclusion by providing more widespread access to digital financial solutions. PayPal leverages blockchain technology to make financial services more accessible and affordable, particularly in regions where traditional banking infrastructure may be limited.
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