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Highlights
- Paypal USD stablecoin now upgraded to power cross-border transfers
- This new functionality is powered by Xoom, Paypal's money transfer service
- The new feature is available in about 160 countries
Xoom, PayPal’s cross-border money transfer service has launched a new funding option that will allow U.S. users to finance international transfers using PayPal USD (PYUSD), its dedicated stablecoin pegged to the U.S. dollar.
Paypal USD Deployed For Borderless Transactions
According to the announcement from PayPal, Xoom users in the United States will pay no transaction fees when using PayPal USD to fund eligible transfers to recipients in over 160 countries.
The innovation from Xoom is coming at a time when consumers are increasingly seeking cost-effective alternatives for cross-border payments.
This is particularly important given the high cost associated with cross-border payments. Ripple in a move to harness the gains in the sector teamed up with Onafriq for cross-border payment in Africa, UK, Australia, and the Gulf Cooperation Council.
According to a World Bank Q3 2023 report, the global average cost of sending $200 internationally stands at slightly over 6%. Thus, by waiving Xoom transaction fees for its users and allowing transfers funded with USD converted from PYUSD, Xoom hopes to provide a more economical option for cross-border money transfers.
In a bid to accelerate the use of PayPal USD for on-chain transactions, stablecoin issuer Paxos recently inked a new strategic partnership with Chainlink to provide market data for the PayPal USD stablecoin on the blockchain.
The Need For Cross-Border Payments
Jose Fernandez da Ponte, Senior Vice President of the Blockchain, Cryptocurrency, and Digital Currency Group at PayPal, maintains the objective behind the creation of PayPal USD was to ensure stability in value and utility in payments.
“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 also offering an easy way to securely send money to friends and family at a lower cost,” Fernandez da Ponte stated.
PayPal had in August of 2023 introduced the stablecoin pegged to the USD. In a strategic move to catalyze the acceptance of digital currencies for transactions and consolidate its position in the realm of digital payments.
The Senior Vice President says when U.S. users opt for this funding method, Xoom will facilitate the conversion of PYUSD to USD currency without any crypto sale fees from the user’s PayPal Cryptocurrency Hub. The recipients will then receive funds in the fiat currency selected by the sender to ensure a hassle-free transaction process.
However, any transaction completed in currencies other than USD will be subject to a transaction exchange rate, which includes a currency conversion spread.
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