Here's what happened in payments this week

Happy Weekend! Payments Weekender is a collection of our favorite payments news of the week from BI Intelligence, Business Insider's paid research service.

PAYPAL WILL ACQUIRE DIGITAL REMITTANCE COMPANY XOOM: In a move that will give PayPal a new revenue stream after it goes public, PayPal is going to acquire Xoom, one of the world's largest digital-first remittance companies, for about $890 million at the end of the year.

Xoom is a remittance company that specializes in facilitating mobile and desktop cross-border payments primarily from the US to 37 countries, including large receiver markets like Mexico, China, and India. Xoom is one of the most successful digital remittance companies, moving a total of $6.9 billion across borders in 2014 and earning nearly $160 million in revenues, according to the firm's 2014 10-K. By comparison, competitor WorldRemit only earned $25 million last year, according to TechCrunch.

The acquisition will benefit both Xoom and PayPal in two ways:

• The two companies will expand their customer bases: PayPal will cross-sell Xoom's services to its 68 million customers in the US, while Xoom's existing customers will by default become part of the PayPal network.
• Xoom and PayPal can enter new markets: Xoom plans to expand to new markets by leveraging PayPal's existing global network, while PayPal will be able to deepen its presence in countries where Xoom already operates.

Further benefits to PayPal include:

• Diversification: Xoom gives PayPal a new revenue stream. This is especially crucial now, because PayPal is spinning off of eBay soon and won't be able to depend on the success of eBay's business. PayPal has dabbled in remittances in the past via partnerships with companies like Skype and MoneyGram, however, integration with Xoom's platform will give it a more sizable remittance business.
• It feeds into PayPal's overall business strategy to compete in every type of digital transaction: Earlier this year, PayPal's CEO Elect Dan Schulman talked about moving PayPal into the broader $25 trillion commerce industry. The Xoom partnership makes it apparent that PayPal wants to gain a foothold in potentially any area of commerce, including sectors like remittances that it has never specialized in.
• This could improve PayPal's existing cross-border products: Xoom specializes in digital platforms, especially mobile, which could give PayPal new insights into the mechanisms behind building a customer-friendly cross-border payments product. The partnership could give PayPal the intellectual property to better compete in the broader international payments space.

The implications for the remittance industry are massive. Xoom is already disrupting legacy remittance companies like Western Union and MoneyGram, and with the support of PayPal, Xoom could become an even more high-profile remittance player. Xoom's revenues from electronic channels have already surpassed those of MoneyGram, which has a much larger global network. Although revenue comparisons are somewhat misleading because each company has a different revenue model, it still illustrates how successful and disruptive Xoom has been.

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THE EXPEDITED CHECKOUT CRAZE CONTINUES: As mobile shopping proliferates, a bevy of digital payments companies have developed expedited checkout buttons to try and boost conversion rates. These checkout option require as little as one click for a customer to make a purchase. Visa has been heavily promoting Visa Checkout since last summer, while PayPal has offered PayPal Express Checkout for years. Mobile wallets like Apple Pay provide in-app purchase buttons that require only a fingerprint. Braintree, a PayPal subsidiary, offers One Touch. And a number of social media companies like Pinterest have rolled out Buy buttons. So it's clear the space is already really crowded.

Now, American Express is taking a stab at online checkout. The credit card company has created Amex Express Checkout, which enables shoppers to purchase things online by logging into their American Express account on the checkout page. This automatically fills in their payment and billing information. From there, all they have to do is hit the purchase button.

As of now, Amex Express Checkout is available on sites like Burberry, Ticketmaster and Warby Parker. However, it will also be available to small businesses that work with Stripe.

AmEx's expedited checkout tool could gain traction for a few reasons:

• It doesn't require customers to create a new account: Amex customers will be able to use it by entering their online account username and password, which they have already set up. This reduces onboarding friction, which could help cultivate an early user base. This early activity could in turn encourage more large merchants to accept it.
• There's a $10 credit for first-time users: American Express customers will receive a one-time $10 credit per merchant they use the checkout button with. This will also help grow an early user base.
• Amex cardholders are attractive to merchants: Amex customers spend more money on average compared to other cardholders. A low-friction checkout tool could cause them to spend even more. This will further build Amex's merchant partnerships, providing more use cases for customers.

Expedited checkout buttons are proliferating because they benefit everyone in the value chain:

• Customers have a better shopping experience: Expedited checkout buttons ease the friction of making an online purchase, because customers don't have to enter as much information.
• Merchants see higher conversion rates: 69% of Visa Checkout customers end up finalizing a purchase, compared to just 41% for a traditional checkout customer. This brings in more sales for a merchant.
• Payment companies see higher transaction volumes: Because buy buttons are low-friction, customers will likely use them which means more transactions for the card brand and ultimately more revenue.

SAMSUNG PAY STILL WORKING OUT SOME KINKS: Samsung has commissioned eight Korean card companies to test out its forthcoming mobile wallet, Samsung Pay, in an effort to smooth out some persistent technical issues it's facing, Android Authority reported.

Samsung Pay isn't working with older payment terminals. The mobile wallet reportedly fails to transmit payment data to older magnetic stripe-based point-of-sale (POS) devices on the first try, forcing users to make multiple payment attempts. Android Authority speculates that over half of the terminals in Korea are more than 10 years old, and could therefore cause these same hiccups. If the reports are true, then this could be the main reason why Samsung recently delayed the mobile wallet's launch from July to September 1.

This could strip away Samsung Pay's ubiquity, hurting the customer experience. Samsung Pay is supposed to be compatible with all three major in-store payment terminal technologies - mag stripe, EMV and NFC. However, if it works intermittently with mag stripe, the technology behind the majority of terminals in the US, this would create a negative user experience which could lead to attrition. Moreover, if Samsung Pay fails to work with mag stripe altogether for retailers with outdated POS systems, customers won't be able to develop habitual usage across retailers.

ALIPAY REVAMPS MOBILE WALLET: Alipay, the mobile wallet from Alibaba-affiliated Ant Financial, has incorporated peer-to-peer (P2P) transfers and messaging, features that could transform Alipay into a broader commerce platform. Previously a mobile wallet focused on making in-app and in-store payments, the app now comes with new features divided into "Merchants" and "Friends" tabs, according to Finextra.

• "Friends" tab: This tab includes peer-to-peer money transfers, payment reminders, and a messaging platform that allows users to send coupons and offers to one another. The messaging tool in particular could spur network effects, since it gives users the ability to share merchant deals with their friends. This could increase shopping activity among Alipay users by building awareness of deals.
• "Merchants" tab: This tab shows the locations of retailers who support Alipay, and also lists out available coupons for items provided by those retailers. Once at the store, users can redeem coupons and make in-store mobile payments with their Alipay app as usual.

The revamped app "is no longer a wallet," according to Fan Zhiming of Ant Financial. "It is a platform which will change the way you shop..."

The expanded features are part of a larger move by Ant Financial to expand Alipay's
commerce presence:

• Ant Financial recently invested almost $1 billion in Koubei, a local shopping services platform in China that can be accessed through Alipay.
• Ant Financial has also partnered with KFC China and Walmart to enable Alipay in-store payments.

The moves will help Alipay retain its formidable share of the mobile payments market in China. Alipay held over 82% of the mobile payments market in China last year, among non-bank processors.

APPLE PAY'S TRANSACTION LIMITS: UK merchants have received their Apple Pay implementation materials, which state that Apple Pay purchases will be subject to the current contactless card limit of £20, according to materials leaked to 9to5Mac. We previously reported that Apple Pay transactions would perhaps be limited to £20 transaction for this reason. The leaked starter guide also specifies that Apple Pay will officially launch on Tuesday, July 14.

Although the guidelines dictate that the value of transactions will be capped, Apple states on its website that merchants with the most updated point-of-sale (POS) systems will be able to accept transactions of any amount. The value limit on Apple Pay transactions processed through older systems may also rise with the contactless card limit which is set to increase to £30 in September.

Discrepancies between the transaction limits could confuse both merchants and consumers:

• Merchants: Merchants with upgraded terminals may limit Apple Pay transactions if they only see the paper guidelines. Moreover, merchants that read the starter kit might assume that they will have to abide by the limit no matter what, and this could discourage them from upgrading their terminals.
• Consumers: Varying transaction limits from merchant to merchant will create a bad user experience that could stymie adoption and habitual usage. For example, if a customer walks up to a storefront and they believe there's a chance the store might limit transactions, they might be hesitant to try Apple Pay there.

PROSPER REACHES NEW MILESTONES: Prosper, the country's largest privately-held peer-to-peer (P2P) lending marketplace, continues to grow its quarterly volumes, a sign that P2P lending is still a hot industry in the US.

• A record quarter: Prosper facilitated $912 million in loans through its online platform, marking the largest single quarter in its history. This represents 1,153% growth from Q2 2013 and a 147% jump year-over-year (YoY).
• New major milestone in cumulative loans: Prosper has now processed a total of $4 billion in loans since the platform was launched in 2006.
• But growth is slowing: Quarter-over-quarter (QoQ) growth in loan originations has slowed from 477% in Q1 2014 to 147% in Q2 2015.

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