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Xoom Allies with Red Pocket Mobile

Zacks Equity Research

San Francisco-based digital money transfer provider – Xoom Corp. (XOOM) announced a strategic alliance with the US-based leading contract-free wireless service provider – Red Pocket Mobile, to enhance its current global money transfer network.

As of Jun 2013, Xoom already enjoys a strong customer base of over 915,000 clients, who send and receive money to and from over 30 countries across the globe on a yearly basis.

Accordingly, Xoom will open up its website for money transfer services to the customers of Red Pocket Mobile through mobile as well as stationary electronic devices such as smartphones, laptops and desktops. The idea is to add value to the business by giving the customers access to convenient and secure money transfer options.

By signing up for Xoom, the customers of Red Pocket Mobile will now be able to remit money across countries where Xoom has market penetration. These include significant markets of India, Latin America, the Philippines, Canada, Australia, South Africa and Europe.

The alliance is also an attempt by Xoom to enter the rapidly growing space of money transfer through mobile devices. In this regard, the company had also launched the Xoom Money Transfer App in Spanish to tap the vast Latin American and other significant markets. This application is available in the latest Android and iOS mobile devices.

Given the intense competition in the money transfer business, Xoom is focusing on innovative methods to make a mark in the digital payments’ space. Moreover, the scope of growth also justifies the company’s robust network accretion so far in 2013.

We believe such alliances will not only boost Xoom’s leading global market position but will also accelerate its organic growth by boosting its money transfer business. Simultaneously, these efforts will also enhance demand for global remittances and boost the company’s brand value.

Along with Xoom, strong peers Visa Inc. (V), MasterCard Inc. (MA) and Fiserv Inc. (FISV) carry a Zacks Rank #2 (Buy).

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