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Xoom is an international money transfer provider, allowing customers to send money overseas, pay bills and invoices from abroad, and also buy mobile phone airtime for friends and family living elsewhere. Xoom is part of the PayPal group of companies, and one of a growing number of alternative payment services which let customers send money internationally without using their regular bank.
Traditional banks can be expensive and inefficient when it comes to cross border transactions - making alternative services an attractive option. However, it’s still well worth doing some research to check you’re choosing the right provider for your needs. Xoom offers great deals on international payments, but their fee structure may not be the best option for all currencies and countries that you want to send to. This article will explore this in more detail, and also introduce an alternative as a comparison - Wise.
Before you choose an international payment provider, it’s a good idea to compare a few and see which offers the cheapest international money transfer for your particular payment. Fees will differ depending on the currency and country that you are sending to, so always do your research. Xoom may be cheaper for certain currency routes, but is more expensive for others, such as if you want to send EUR to a non-SEPA country or a currency such as AUD.¹
Xoom add their fee on top of the amount you want to send, and this fee is determined on the currency and country to which you are sending. This means that for some transfers you may need to pay more via Xoom than you need to, so you may want to research alternatives such as Wise.
Wise lets you send money all over the world, using the mid-market exchange rate with no markup, and no hidden costs to worry about. There’s just a small upfront fee to pay when you arrange the payment. This makes it simple to see the overall cost - and often proves cheaper than using a bank or alternative payment service.
Let's look at an example payment to compare Wise and Xoom. In this example we will imagine you need to make a £1,000 payment to Australia.
With Wise, the recipient will receive: 1762.67 AUD. With Xoom, the recipient will receive: 1757.00 AUD.
In this example, Wise offer a better deal on your payment, with the recipient receiving 5.67 AUD more. However, it’s not just the recipient who may lose out, you may also need to pay more for this transfer as the sender through Xoom.
*Estimates correct as of 17/07/2019 at 10:53 BST. Exchange rates and pricing can change, so always check the provider’s site for up-to-date information and pricing.
Each provider has their own way of applying the transaction fee for international transfers. Wise subtracts their fee from the total amount, and then converts the amount that is left, at the mid-market rate. Whereas, Xoom adds the fee to the total amount and then completes the conversion.² Here is a quick example of what this means:
1000 GBP - 3.96 GBP (fee) = 996.04 GBP
This means that you paid 1000 GBP for the transfer, as the fee was subtracted from the total amount. The remaining amount of 996.04 GBP was then converted to AUD.
1000 GBP + 17.99 GBP (fee) = 1,017.99GBP
This means that you paid 1017.99 GBP for the transfer, as the fee was added to the total amount. The new amount of 1017.99 GBP was then converted to AUD.
So, you would actually be paying more as the sender for this international transfer through Xoom, than you would with a service such as Wise.
This all a little complicated, and when sending money abroad, you just want to know what you are paying and that you are getting the most value for your money. Wise makes pricing simple, with no hidden fees. So, if you want no hidden-fee stress and to save on international transfers, Wise could help.
As a quick summary, here is an overview of the charges with Xoom you need to know about:
|Fee type||Xoom cost|
|Transaction fee||The fee depends on how much money you’re sending, the destination country, and the currency used. To give an example, there’s an upfront fee of £17.99 to send £1,000 to Australia, but sending the same payment to India won’t incur any transaction fee. Bear in mind though, that there may be a fee hidden in the exchange rate used.|
|Exchange rate markup||When you model your payment, you’ll see the following message: “In addition to the transaction fee, Xoom also makes money when it changes your send currency into a different currency.” This means that Xoom may add a markup to the exchange rate used, which they then keep as profit. This fee can make it hard to see exactly what you’re paying for your transfer.|
|Other possible costs||When transferring money to foreign bank accounts you’ll sometimes come across extra fees due to the SWIFT network. These fees are imposed by intermediary banks involved in processing the payment, and can’t necessarily be confirmed prior to the payment being set in motion. If you fund your payment using a credit card your card issuer might also charge you an extra fee or interest.|
To get more information about the fees and exchange rate used for your specific transfer, you’ll want to head over to the Xoom website and use the tools there to model your payment. Wise value transparency, so you’ll also find a handy tool on the Wise website which lets you compare the service and fees they offer with other providers.
A limitation of using Xoom for international payments is that you can only send money abroad, but you are not able to receive it with this service. Alternative services that also specialise in international transfers, offer the option to not only send money abroad but also to receive payments too.
Take Wise as an example. You can get yourself a Wise borderless account to hold over 40 different foreign currencies, and be able to make and receive global payments. Make life easier - and save money - by getting your own bank account details to let you manage your money like a local in the US, euro area, Australia and New Zealand - and of course here in the UK. You can even get a linked debit MasterCard so that you can easily spend your money when abroad, withdraw from foreign ATMs, and spend online - still making the most of low fees and the mid-market exchange rate.
A further limitation is that with Xoom, you cannot send payments in some currencies, such as AUD, to a bank account as they only offer cash-pick-ups for certain currencies. Wise, make it easy and fast for your recipient to receive their money with convenient direct bank transfers.
If you’re going to be making an international transfer, you’ll be looking for the cheapest way to send money abroad. By comparing a few different options, including banks and modern alternatives like Wise, you’ll find one to suit your needs. Fees will vary depending on your particular payment, so take the time to look at all of the possible fees, as well as the exchange rate being offered. Some providers, such as Xoom may be better value for some payments, but not for others.
Steer clear of hidden costs and surprise charges by doing your research - and check out Wise for low cost international payments with upfront fees and no exchange rate markup.
Sources checked on 17-July 2019.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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