The Nilson Report

THE CURRENT ISSUE: Issue 1067 | Jul 2015

FEATURED COMPANIES

Companies featured in The Current Issue include:

Headlines from The Current Issue

POS Terminal Shipments Worldwide

Top 50 U.S. Prepaid Card Issuers

Amex Express Checkout

PayPal to Acquire Xoom

2Checkout’s Global Payment Services

Coupons.com Links Merchants to Cardholders

PeerTransfer Cross-Border Payments

Third 50 Largest U.S. Credit Card Issuers

Investments & Acquisitions - June 2015

Vantiv Adds Capital One Merchants

Visa Digital Enablement Program

Charts in this Issue

Shipments of POS Terminals - Market Shares by World Region

Investments & Acquisitions - June 2015

Top U.S. Prepaid Card Issuers 2014

U.S. Visa/MasterCard Credit Card Issuers - Third 50 2014

POS Terminal Shipments 2014

POS Terminal Shipments by Region 2014

PayPal Acquisitions

Top U.S. Prepaid Card Issuers 2014

The 50 largest issuers in the United States of prepaid Visa, MasterCard, and Discover cards are ranked by purchase volume (spending at merchants) in calendar year 2014.

1. The Bancorp Bank
$30.65 bil. Purchase Vol.
2. MetaBank
$19.41 bil. Purchase Vol.
3. Comerica Bank
$14.89 bil. Purchase Vol.
4. Green Dot Corp.
$14.15 bil. Purchase Vol.
5. JPMorgan Chase
$11.89 bil. Purchase Vol.

Full access to the Top U.S. Prepaid Card Issuers 2014 results is available when you subscribe to The Nilson Report.

POSTED JUL 16, 2015 | PRINT

PAYPAL TO ACQUIRE XOOM

Xoom, an online and mobile money transfer and bill payment provider, will be acquired by PayPal for $890 million in cash in a transaction expected to close in the fourth quarter of 2015 or the first quarter of 2016. The acquisition has been approved by the boards of directors of both companies as well as by the private equity investors that hold approximately 18% of Xoom’s outstanding shares. PayPal will pay a premium of 32% over Xoom’s three-month volume-weighted average stock price. 

Xoom’s 1.3 million active customers sent approximately $7.00 billion over the company’s proprietary network in the 12 months ended March 31, 2015. That figure includes remittances, bill payments, and mobile telecom account reloads. Remittances are sent from the U.S. to recipients in 38 countries where Xoom has established links to financial institutions and retailers (in select countries). Recipients have the option of having remittances deposited in their bank accounts or paid over the counter in cash. All funds enter the Xoom platform from either a mobile device (60%) or computer (40%). Xoom charges senders between $5 and $10 per transaction depending on the amount of the transfer. 

Xoom will operate as an independent division within PayPal, which will be spun off from eBay this month. Trading of PayPal common stock will begin on Nasdaq on July 20. PayPal expects to retain all of Xoom’s personnel including its CEO. 

PayPal will cross-sell Xoom’s services to its 68 million active U.S. customers. It also plans to expand Xoom’s business by offering it to consumers in select international markets wanting to send remittances.  

PayPal is a transaction account. The acquisition of Xoom offers PayPal the opportunity to deepen its business with existing customers and potentially leverage the emotional relationship that exists between the sender and the receiver of a remittance. PayPal sees opportunities with recipients of Xoom remittances who are underbanked. 

PayPal’s Venmo division operates a person-to-person money transfer system within the U.S. That system is 100% mobile. Transactions occur between the sender’s and the recipient’s Venmo accounts. Recipients can choose to move funds into their bank accounts, which causes at least a day’s delay in availability of cash. 

Jeremy Jonker is VP, Corporate Development at PayPal in San Jose, California, (408) 967-6048, jjonker@paypal.com, www.paypal.com

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