If you’re looking to transfer money across the globe, you might ask yourself, “Western Union or Xoom?”  Founded in 1851, Western Union (WU) has been in the money transfer business for more than 150 years. Although Xoom (XOOM) just came on the scene in 2001, the company offers a very similar service.

Xoom’s Service Is Only Available Online

With Xoom’s international money transfer service, customers can only send money online using their mobile phone, tablet or computer. With Western Union, customers can send money online, but they also can send money from by phone, in-person or from more than 100,000 ATMs worldwide.

Western Union Transfers to More Places

While Xoom currently transfers to 31 countries, Western Union transfers to more than 200 countries and territories across the globe.

Xoom Offers Lower Fees

For the most part, Xoom offers lower prices on international money transfers than Western Union. Additionally, Western Union generally offers less favorable exchange rates than Xoom. Xoom can charge lower fees because it does not have the overhead of maintaining physical customer-facing centers like Western Union.

Keep in mind that both Xoom's and Western Union’s fees vary depending on your country, the country to which you are transferring money, your funding source, the payout currency and the overall transfer amount. The majority of Xoom’s transactions are sent to Mexico and the Philippines, funded from a bank account and disbursed in local currency. For those transactions, the customer pays a flat fee of $4.99 to send any amount up to $2,999. Customers transferring money to Mexico or the Philippines from Western Union can expect to pay higher fees – sometimes twice as much. 

Xoom Only Offers Consumer-To-Consumer Transfers

If you need to transfer money to a business, you’ll have to go with Western Union. Xoom only allows consumers to transfer to other consumers (family and friends), whereas Western Union offers both consumer-to-consumer transfers as well as business transfers and bill-payment services.

Western Union Allows Cash as a Funding Source

With Xoom, customers can only transfer money from their checking account or debit or credit card. The company does not accept cash as a funding source. Because Western Union has physical locations staffed with agents worldwide, it accepts cash for money transfers. With Western Union, you can walk into an office, give an agent cash and transfer the money to a recipient thousands of miles away. Your recipient can also receive the money in cash – immediately, in some cases. If you or your recipient doesn’t have a bank account, Western Union is probably the better bet.  

Western Union Usually Offers Faster Processing Times

Although Xoom promises instant transfer in certain countries, the company often has very little control over the actual delivery to the recipient’s account. That’s because processing times depend on each individual bank. On the other hand, Western Union can ensure quick delivery because it has its own agents across the globe.

The Bottom Line

Xoom and Western Union are both viable money transfer options. The best choice for you depends on many factors, including how much money you’re sending, how quickly you need to send it, whom you’re paying and where they live. Before you settle for one of these services, be sure to calculate the fees and exchange rates on each company's websites. 

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.