Xoom is a digital money transfer service that enables U.S. citizens to send money, reload their phones, and pay bills in a growing number of countries. It is not for sending money within the U.S.
The company began in 2001 in San Francisco, California and was bought by PayPal in 2015. It now features PayPal integrations and can leverage PayPal’s global reach to expand its services. However, it does function as a separate service.
Here’s an in-depth review of Xoom’s money transfer service.
How does Xoom transfer work?
You can log in to Xoom through its website, mobile site, or the Xoom app. From there, you can send money to recipients, reload your phone, or pay bills. If you’re sending money to a person, you have the option to send it to their bank or one of the 14,000 participating locations for cash pickup.
Xoom transfer costs
Xoom charges a transaction fee and also makes money when it converts U.S. dollars to the currency of the destination country. Here’s a closer look at how it works.
The amount of the transaction fee varies by the type of transaction, how much you send, how you send it, and the country of the recipient. Xoom has a transfer fee calculator, so you can easily see the cost of the fees.
Funding a money transfer from a bank account is the cheapest option. In most cases, it ranges from free to $4.99. On the other hand, the transfer fee for funding a transaction from a debit or credit card increases as the transfer amount increases. Here’s an example.
If you send $1,000 by credit or debit card, you pay $24.99.
If you pay $10,000 by credit or debit card, the fee increases to $75.99.
So, using your bank account to fund transactions is the best way to pay for transfers and minimize your costs. However, if you want the payment to go through as quickly as possible, using a credit or debit card can shave off a few business days of processing time.
The second part of the cost comes from the currency conversion. Here is an example of how Xoom makes a profit from it.
Today, according to XE, the conversion rate for U.S. dollars (USD) to Mexican pesos (MXN) is 1 USD = 18.27 MXN. On the other hand, the Xoom exchange rate is 1 USD = 17.78 MXN. Note the 0.49 peso difference.
Now, you are buying something from a Mexican seller that costs USD 1,000. According to the exchange rate above, $1,000 MXN = $18,270 MXN. However, when you log into Xoom, your dollars are only worth 17.78 pesos each.
This means if you send USD 1,000, your recipient is going to receive MXN 17,780, which will be MXN 490 (USD 26.81) short of USD 1,000.
You will need to send MXN 18,270, which converts to USD 1027.84 at the Xoom conversion rate. The extra $27.84 in this example goes in Xoom’s pocket.
While exchange rates can be a bit confusing, it is typical for currency converting services to make a profit from conversions. If you go into a bank in Mexico and convert your dollars to pesos, you will also lose a little on the exchange.
For example, Banorte, a large bank in Mexico, is buying dollars at the rate of 1 USD = 17.15 MXN on the day of this writing. This is a 0.63 MXN less than you get with Xoom, which means it would cost you $1065 USD to purchase the equivalent of $1000 USD in MXN.
So, Xoom’s rates aren’t bad.
Xoom transfer limits
How much money can you send?
Xoom has different levels which allow for various limits.
Level one is where all customers start and it allows you to send the following amounts.
- $2,999 USD per transaction
- $2,999 per 24 hours
- $6,000 USD per 30 days
- $9,999 USD per 180 days
Level two requires you to provide your social security number, primary source of income, and occupation. If you go through this verification, you can send the following amounts.
- $10,000 USD per transaction
- $10,000 USD per 24 hours
- $15,000 USD per 30 days
- $25,000 per 180 days
Level three requires submitting a copy of your passport, your last two pay stubs, and your last two bank statements. Additionally, you will need to tell Xoom details such as your relationship to the recipient and the reason you are transferring money to them. The amounts can then increase as follows.
- $10,000 USD per transaction
- $10,000 USD per 24 hours
- $25,000 USD per 30 days
- $60,000 USD per 180 days
It’s important to note that some of Xoom’s payout partners have lower limits than Xoom, and other restrictions may apply.
One Xoom customer explains, “I wanted to purchase a car in Mexico and, due to daily ATM limits, couldn’t get enough money out to buy it in a timely manner. I found Xoom and saw I could send $6,000 within 30 days. I decided to use it to send money to myself for cash pick up.
When deciding on a pickup location, many had much lower limits than the $2,999 per day or per transaction set by Xoom. For example, WalMart has a limit of $930 USD per transaction, and Banco Banorte limits you to $8000 MXN (about $439 USD) per 15-day period in certain Mexican states. For this reason, when sending money for cash pickup, it is very important to research the pickup location limits in the city you are sending money to.”
What countries are included?
Visit Xoom’s website and click on “About Us” to see the growing list of countries you can send money to using Xoom.
Xoom customer service
Xoom provides live customer support 24/7. You can call in anytime and speak to a representative in English, Spanish, or Filipino. You can also log into your account on the website or in the Xoom app to view transactions and track their progress.
Further, when you initiate a transfer or payment, you can opt for you and the recipient to receive emails or text messages. These will update both parties as the transaction progresses.
One Xoom customer says, “My personal experience with Xoom customer service has been pretty good. I use Xoom several times per month as I am an American that works and travels abroad. I use it to pay bills. There have been a few instances where my transactions require further verification.
For example, when I sent two payments to the same person, due to limit restrictions, Xoom thought it might be a mistake. I had to go through a verification process, but the transaction was cleared within 24 hours. I was updated via email throughout the process. Overall, the customer service representatives were helpful and thorough.”
Xoom offers 128-bit data security encryption security on its website. This protects its users’ transactions and financial information. As for its servers, they are not directly connected to the internet and are behind a firewall. Further, all employees must pass a financial and criminal background check to work at Xoom.
When it comes to transaction security, if for some reason your recipient does not receive your money, Xoom refunds the transaction in full. If an unauthorized individual uses your Xoom account, Xoom will conduct a thorough investigation. It will refund any losses you incur as a result of fraudulent activity.
Xoom money transfer process
Here’s how the money transfer process works with Xoom. Once you create an account, you’ll visit the website and enter your Xoom login info. Then, follow these steps.
1.) Select the country where you want to send money.
2.) Select the amount you want to send.
3.) Select how you want your recipient to receive the money; cash pickup or bank deposit.
4.) If you choose the cash pickup option, you will choose the pickup location that best suits your needs (all limits will be visible). If you choose the bank deposit option, you will enter the bank details of the recipient.
Select a cash pickup location:
Or, enter the recipient’s bank details:
5.) Provide the basic information about your recipient.
6.) Select how you want to pay.
7.) Enter your bank or card information (must be from the U.S.).
Enter bank details:
Or, enter credit or debit card details:Review your transaction details and authorize the payment.
8.) Review your transaction details and authorize the payment.
It’s a simple and straight-forward process.
Xoom review and summary
Xoom’s service is helpful for U.S. citizens or permanent residents who want to transfer money internationally. This quickly growing company is under PayPal’s wing and is continuously adding new countries to the list of areas it serves.
It offers great accessibility and convenience so that international transfers don’t have to be a huge hassle. Further, the costs are competitive in the market. This is especially true when sending from your bank account versus your credit or debit card.
The drawbacks that appear in Xoom reviews warn users to check pickup location limits carefully. Some also say Xoom is “too secure,” requiring a tedious verification process on many occasions.
However, considering all aspects, it can make sending money abroad easier and more affordable.