What Is Xoom?

Find out how this international money transfer service works

Xoom is an online money transfer service that lets you send funds within the U.S. and to countries around the world quickly, easily, and affordably.

You can also use Xoom to pay the bills of family and friends who live abroad. What's more, Xoom provides the means to reload prepaid mobile phones located internationally.

All this can be done conveniently and at any time using your smartphone, tablet, or computer.

Acquired by PayPal in 2015, this international money transfer service is headquartered in San Francisco. It currently has over 160 transfer destination countries including Italy, Germany, France, Australia, the Philippines, India, Canada, the United Kingdom, Mexico, Argentina, and Brazil.  

Key Takeaways

  • Xoom is an online money transfer service and subsidiary of PayPal.
  • Use Xoom to send money to family and friends in over 160 countries.
  • You can make transfers using the Xoom app on a phone or at its website.
  • You can fund your international transfers with a bank account, PayPal balance, debit card, or credit card.
  • Fees for international transfers depend on the funding method, transfer amount, destination country, method of delivery, and in which currency they're delivered.

How Does Xoom Work?

Xoom partners with companies around the world to make safe, secure, and affordable international money transfers.

Depending on the country to which you send money, the funds can be delivered by hand, picked up, or deposited directly into a bank account. They can also be added to debit cards (in eligible markets).

You can fund and pay for your money transfers using a bank account, a PayPal account, a debit card, or a credit card.

The transaction fee you pay will vary depending on the destination country, the currency exchange rate, the amount of money that you're transferring, and your funding source.

How Much Can Be Sent?

The amounts that you can send also vary according to certain factors, such as the way the money is handled on the receiving end, e.g., direct deposit to a bank account or a cash pickup.

Generally, the minimum transfer amount is $10. In a 24-hour period, the maximum transfer amount is $2,999. In a 30-day period, it's $6,000. In a 180-day period, the maximum transfer amount that you can send is $9,999.

How Does a Transfer Work?

  1. Sign up for a free account or log in with your PayPal account, if you have one.
  2. In the My Account tab, select the country to which you're sending funds.
  3. Enter the amount.
  4. Select how the money should be paid out (cash pickup, direct deposit to a bank, delivery to a specific location).
  5. Choose your funding/payment option: PayPal balance, bank account, debit card, or credit card.
  6. Enter the information requested for your recipient.
  7. Pay for your Xoom money transfer.

While most Xoom money transfers arrive and are available within minutes, some can take several days, often due to the different financial intermediaries involved. You can get updates for your money transfer's status by email and text. If you prefer, you can also check on your money transfer at the Track Transactions page on Xoom's site.

Where money transfer service providers are concerned, you have choices. For instance, although Xoom is owned by PayPal, PayPal also offers online transfers. So does MoneyGram. All have different fees.

How Much Does a Xoom Money Transfer Cost?

Xoom’s money transfer transaction fees depend on your country, the country to which you're transferring money, your funding source, the payout currency, and the transfer amount.

You’ll pay the lowest fees if you transfer money using your PayPal account balance or a U.S. bank account. However, a bank account-funded transaction can take several days because it's a more complex transaction involving different financial institutions.

If you pay with a credit or debit card, the fees are higher (but transaction processing is faster).

Xoom offers an exchange rate and fee calculator to help customers determine the total price of the transfer as well as the amount their recipient will receive (based on currency exchange rates).

Let’s say you want to send $500 to a friend in India. According to Xoom's calculator, it would cost you $4.99 to send the money from your PayPal or bank account for deposit into a bank account in India. Alternatively, if you wanted to pay with a credit or debit card, you would pay $15.49.

In addition to that transaction fee, Xoom will charge a currency conversion fee. This will vary according to the current exchange rate related to the destination country and the markup that Xoom applies.

The fees are lower for some countries. For example, if you wanted to send $500 to a family member in Chad, it would cost you a total of $2.99, whether you paid with a credit/debit card or directly from your account.

Xoom vs. PayPal

What's the difference between the money transfer services each of these companies offers?

With PayPal, you can send funds to family and friends within the U.S. and get payments from business customers. PayPal doesn't offer an international money transfer option. However, it doesn't have to because its subsidiary Xoom can be used for that. There's no transaction fee when you send money abroad with Xoom using your PayPal account balance as the funding source.

Xoom has a solid standing, thanks to its reliability, service guarantee, and relationship with PayPal. Unlike PayPal, Xoom allows you to transfer funds within the US as well as internationally.

In addition, someone who receives a money transfer via Xoom doesn't have to have a Xoom account. With PayPal, they do.

Xoom doesn't offer business money transfers while PayPal has facilitated them for years.

Xoom was the victim of a massive fraud scheme. In January 2015, the company announced that $30.8 million was fraudulently transferred to overseas accounts through employee impersonation and fraudulent requests targeting its finance department. No customer money transfers were affected directly. Since then, Xoom was acquired by PayPal. This new relationship improved its security and it has reported no new fraudulent activities.

Advantages and Disadvantages

Advantages

Xoom's price for international money transfers is higher than some services and lower than others. It can be fee-free if you use a PayPal account balance to fund your transfer.

According to Xoom’s website, its transfer service is also extremely secure. Xoom says it uses a 128-bit data security encryption to protect all information sent between the customer’s web browser and its website.

The company is certified and accredited by third-party privacy organizations and regulated by both state and federal U.S. government agencies.

Xoom also offers a money-back guarantee. If for any reason your money is not received by your recipient, it will refund your transaction in full.

Disadvantages

Some critics complain that Xoom often plays it too safe, resulting in extra hassle for the customer and lengthy processing times.

The service has received numerous complaints on the Consumer Affairs website. For example, some customers have reported that their money was held for too long, or that Xoom’s agents asked too many unrelated questions. Some posts mentioned that Xoom requested too much additional proof or information, such as bank statements.

Of course, taking these additional measures (and refusing to accept cash as a funding source) help prevent money-laundering schemes and terrorism financing.

Xoom Pros and Cons

Pros  Cons
Variety of delivery options Transaction fee can run high
Transfer to over 160 countries Exchange rate markup boosts cost
Fast transfers often in minutes Complaints about stringent requirements
Good customer service
Easy-to-use app and website

What Is Xoom?

Xoom is an online money transfer service that allows customers to transfer money within the U.S. and to international destinations. Using Xoom, customers can also pay certain bills in a number of different countries. They can also reload prepaid mobile phones.

Is My Money Safe With Xoom?

According to Xoom, it works with "trusted banks, cash pickup locations, and home delivery services to help ensure secure money transfers. We also encrypt payment data to safeguard your financial information, as well as comply with national and local laws and regulations to protect against fraudulent transactions."

Does Xoom Charge a Fee for International Money Transfers?

Yes. The transaction fee depends on the country where your funds are going, how much you're sending, what the funding source is (a bank account, a PapPal account, a credit card, or a debit card), and how the recipient will obtain the money. There will also be a cost associated with the currency conversion.

The Bottom Line

For customers looking to send money to friends and family across the globe, Xoom can be an affordable alternative to other international money transfer services. The company also assures customer safety and offers a money-back guarantee.

Article Sources
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