PayPal to buy digital money transfer provider Xoom

PayPal Inc said it would buy digital money transfer provider Xoom Corp for $890 million as it muscles into an international remittance market and expand in countries like Mexico, India and China ahead of a spinoff from eBay Inc. 

"The acquisition would allow Xoom to expand into new markets with less execution risk," Xoom CEO John Kunze said.  Xoom, which has 1.3 million customers and a presence in 37 countries, allows users to transfer money via desktop, mobile phones and tablets.

PayPal faces increasing competition from rivals like Stripe and Square, which is popular with smaller businesses, and Apple Inc's Apple Pay. Online commerce foe Amazon.com Inc is also beginning to explore in-store payments.

JP Morgan Securities LLC is financial adviser to PayPal, while Sidley Austin LLP is its legal adviser. Qatalyst Partners is financial adviser to Xoom and Goodwin Procter LLP is its legal adviser.