Xoom vs PayPal: Which one is cheaper? (2023 review)

Adam Rozsa

In this guide, we’ll be comparing two main players in the world of money transfers - Xoom and PayPal. So that you can get the best deal, we’ll look at the fees, exchange rates and any other costs associated with using each service.

And of course, we’ll also show you an alternative - Wise. Send money internationally with Wise, and you’ll only pay low, transparent fees¹. Transfers are fast, secure and convenient, and you’ll always get the mid-market exchange rate - but more on this later.

Register a Wise Account today

Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up-to-date pricing and fee information.

Xoom vs. PayPal - key features compared

Before we get into looking at fees and charges, it’s useful to run through a little about what PayPal and Xoom each have to offer.

PayPal is known for being quick, easy and straightforward to use. Once you have a PayPal account, you can send payments easily, in just a few clicks or taps. There’s even a PayPal app for your cell phone. However, it does have rather a long and complicated list of fees. We’ll get to these in just a moment.

Xoom, meanwhile, is a specialist international money transfer service. It’s actually owned and run by PayPal, but is designed just for sending money overseas.

Xoom offers a number of options for making international transfers. You can send to bank accounts and debit cards, or arrange for cash delivery or collection (if available in your chosen destination). All payments can be set up online, once you have an account.

Xoom vs. PayPal - transfer fees

Now, how much does it cost to send money to another country with both Xoom and PayPal?

There are a few different things you need to check before choosing a provider. These are the upfront transfer fee, and the exchange rate. There may also be currency conversion fees or other charges.

Xoom transfer fees

Xoom charges transfer fees which vary depending on a few key factors²:

  • The type of transaction, including payment and delivery method
  • The currency you’re paying in, and the currency the recipient will be receiving in
  • The country the money will be sent to
  • The amount.

Luckily, Xoom has a handy fee calculator available. You can use this to see how much your transfer will cost before you send it.

To give you an idea of Xoom fees, here are the charges for a transfer from USD to EUR, when funded by a bank account or PayPal balance²:

Amount sentBank depositCash pickup

If you pay for your transfer using a debit or credit card, you can expect to pay an additional fee².

As you can see from the table above, Xoom fees vary considerably depending on the particular transfer. For this example, you won’t pay any fee for sending $1,000 or more (for this hypothetical transfer), unless you choose cash collection - then, there’s a hefty fee of $17.99 to pay.

PayPal transfer fees

PayPal charges fixed fees for international personal transfers. These are the same whether you pay for your transfer using your PayPal balance, bank account, card or Amex Send Account.

The fee is 5%, with a minimum of $0.99 and a maximum of $4.99. There’s also an additional 4% fee for currency conversion, if required³.

So, all things considered, the fees for sending internationally with PayPal may get a bit high.

Are there any other fees?

PayPal does have some additional fees that you might need to know about. For example³:

  • Fixed fee for receiving an international payment in another currency (varies by currency)
  • Fees for withdrawing from your personal PayPal account. It’s free to withdraw to a local linked bank account (as long as no currency conversion is needed). But you’ll pay 1.75% for instant transfers or to withdraw to a linked debit card. You can also have your PayPal balance mailed to you for a fee of $1.50.

Exchange rates

Both Xoom⁴ and PayPal³ are likely to add a mark-up or margin to what is known as the mid-market exchange rate. Also known as the interbank rate, this is the one you’ll find when searching on Google or on currency sites like XE.com.

Both companies call this a ‘currency conversion spread’, and it’s how they make money from the transfer.

💡 Not every money transfer service adds this mark-up though. Send money with Wise, and you’ll always get the mid-market rate, with no hidden margins or costs.

Xoom and PayPal costs compared

To help you see the true cost of a transfer with Xoom or PayPal, let’s run through a quick hypothetical example.

Let’s imagine you want to send $500 to a friend in Europe (EUR). Here’s how much you’ll pay to carry out this transfer with Xoom, PayPal and Wise too⁵:

ProviderTransfer feeExchange rateRecipient receives
Xoom⁴$4.99 USD0.897225€444.14 EUR
PayPal³$4.99 USD0.887387€439.27 EUR
Wise$3.96 USD0.934250 - mid-market rate€463.43 EUR

So as you can see, the exchange rate really does make a big difference in international money transfers.

Wise’s fee for this transfer is only a dollar less than the others, but the recipient receives nearly €20 EUR more at the other end. It’s all thanks to that great exchange rate, which means that your lucky recipient gets more money.

Get a Wise Account today

💡 If you’re interested in more alternatives to both Xoom and PayPal, read our guides here: Alternatives to Xoom, Alternatives to PayPal.

And that’s pretty much it - our guide to Xoom vs. PayPal and how much each service costs. We’ve covered fees in detail, along with exchange rates and a handful of examples. This should help you get a better idea of the cost of each, and how they compare to alternatives such as Wise.

The bottom line? Always check the exchange rate along with the transfer fee. It could make a huge difference to how much of your money lands in your recipient’s account. If a provider has a calculator for fees and exchange rates, use it. Best of luck with your transfer!

Frequently asked questions

Still have questions about Xoom and PayPal? We’ve put together some answers to frequently asked questions about each service, which should help to clear things up.

Are Xoom and PayPal the same thing?

Xoom is technically a PayPal service, but the two are quite different. PayPal offers a wide range of online payment services, while Xoom is specifically focused on international money transfers.

Is Xoom by PayPal reliable?

Xoom has a money-back guarantee in place, just in case something goes wrong and the money doesn’t arrive. If your recipient doesn’t receive the payment, Xoom will refund you the money in full⁶.

Are Xoom fees high?

If you shop around and compare a few different providers, you’ll probably find that Xoom’s fees are reasonably competitive. However, you’ll need to watch out for high fees for some transfer types, such as sending over $1,000 for cash pickup.

Can Xoom be trusted?

Xoom has a number of security measures in place to protect you and your money, and your details. This includes 128-bit data security encryption, and storing information on servers that are protected both physically and electronically⁶.

And as a PayPal service, all of Xoom’s money transmission services are regulated by the federal government and other US agencies⁶.

Sources used for this article:

  1. Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up-to-date pricing and fee information.
  2. Xoom - Send money
  3. PayPal - Fees
  4. Xoom Help - How much does it cost to send with Xoom?
  5. Wise - Send money
  6. Xoom - Online security and privacy at Xoom

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 TransferWise 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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