Review of Xoom: PayPal’s Money Transfer Provider

Xoom is PayPal’s international money transfer service. It lets users send money, pay bills or reload cell phone balances for friends and family in 132 different countries and territories around the world.

Launched in 2001, the company was acquired by PayPal in 2015 for about $1.1 billion. The deal allow PayPal to expand its money transfer services to the remittance and international money transfer service market. Two years after the acquisition, Xoom’s active users grew by 30%, while its monthly transactions rose by 50%.

Xoom money transfer highlights

• Quick transfer process: If you’re sending less than $10,000 USD, the transfer process can be completed within minutes.
• Reasonable fees: Xoom offer some of the lowest fees among international money transfer peers offering the same tier of service. Companies who do not service as many countries, or offer only services such as bill pay or cell phone reloads may have lower fees.
• Difficult verification process: Companies who deal with your finances are required to verify your identity. This is true no matter which money transfer company you use. However, Xoom has a high number of complaints asserting that the verification process is particularly difficult.

Sending a money transfer with Xoom

Transferring money with Xoom is easy. You start out by entering how much you’d like to send either on Xoom’s website or via its app. You’ll also enter your desired currency if you need to convert. Depending on where you’re sending the cash, your recipient will either be able to pick up the cash with one of Xoom’s local partners, receive the money in their bank account via direct deposit or get the cash hand delivered to them.

The more documentation you send Xoom, the more money it will let you send. Residents in both the U.S. and Canada are split into three different levels of sending privileges. You must provide personal data for your profile in order to qualify for Level 1. At this level, you are able to send $2,999 USD ($999 CAD) every 24 hours, a total of $6,000 USD ($5,000 CAD) every month and up to $9,999 USD ($9,999 CAD) over a six-month period.

U.S. residents must provide a Social Security number or passport in order to get bumped up to Level 2. Canadian residents must supply a utility bill in order to earn the same status. At this level, you can send $10,000 USD ($12,500 CAD) every 24 hours, $20,000 USD ($25,000 CAD) every 30 days and $30,000 USD ($40,000 CAD) every six months.

The highest level — Level 3 — requires U.S. residents to provide answers to some security questions Xoom sends you via email, along with a copy of your driver’s license, passport or Green Card, and a recent bank statement or pay stub. Canadian residents must answer the same email questions, but only need to provide a copy of their driver’s license, passport or permanent resident card in order to obtain Level 3.

At this highest level, you can send $50,000 USD ($12,500 CAD) every 24 hours, $60,000 USD ($40,000 CAD) every 30 days and $100,000 USD ($80,000 CAD) every six months.

Once you’ve determined how much you want to send and where, Xoom will calculate the fees depending on where you’re sending the remittance, and how your recipient will be accepting the money. This fee may vary if you choose a method of payment aside from direct deposit via your bank account — this method tends to be the cheapest way to fund remittances on Xoom, though you can use a debit or credit card for a significantly higher fee. Bear in mind that these transfers are likely to show up as cash advances on your credit card statements, so there are likely to be additional fees and interest charged by your credit card company should you choose this method of funding.

Once you’ve submitted all the information for your transfer, you’ll be asked to either log in or provide that basic personal data to get you to up to Level 1 and open your profile. To create your Xoom profile, you’ll need to provide your first and last name, email and phone number. You can also choose to connect to Xoom via your PayPal profile.

Getting money to your family or friends around the world usually takes only minutes. In order to send the money, you will need the recipient’s name and address as it appears on their ID. If you are reupping a prepaid phone balance, you will need their phone number, and if you are paying a bill for them you will need the company’s name and the recipient’s account number.

The exception to this quick turnaround is large amounts of money. For example, amounts over $10,000 USD can take two to three business days to go through processing. Depending on where your recipient lives, you may be able to send them money directly to their bank account. If not, the money can be ready for them at one of Xoom’s local business partners in their area within minutes. In some cases, money can be delivered by hand directly to your recipient’s door.

Pros and cons of Xoom

While there are a lot of good things about Xoom, it has its drawbacks, too. You’ll have to compare things like fees and services against a difficult verification process.

What people are saying about Xoom

Xoom is an accredited business with the Better Business Bureau (BBB), and has an A+ rating. However, the review rating is a low 1.5 stars, with many of the reviews lodging complaints about the verification process.

To avoid these apparently common pitfalls in the verification process, make sure you read the User Agreement in full and be prepared to provide requested documentation. These verification steps are required to certify who you are who you say you are, protecting Xoom users from fraud. However, you’ll want to go in with your eyes wide open to the fact that Xoom’s verification process may be arduous despite its necessity.

Alternative money transfer options

MoneyGram

• Where can you send money? You can send money domestically and to over 200 foreign countries and territories.
• How long does a transfer take? Money is available for cash pickup within minutes, but transfers to bank accounts can take anywhere from one hour to the next business day depending on where you are sending the money.
• How much can you send? $10,000 max per online transfer and per month for most countries if you are sending online. You can send more money by visiting a MoneyGram agent in person.
• Fee to send money: Fees will vary depending on how you are sending the money, where you are sending the money and how your recipient will be receiving the money. Overall, DepositAccounts.com’s analysis puts MoneyGram’s fee range between that of Xoom and WesternUnion.

You’ve probably heard of MoneyGram, as it’s one of the largest money transfer services in the US. You can also use the service to send money internationally, accessing even more countries and territories than Xoom. However, transfer limits are capped at $6,000 in any 30 day period, and fees can be much higher than Xoom depending on circumstances.

OFX

• Where can you send money? Transfers can be made from the U.S. to one of 56 foreign countries, and vice versa (transfers within countries are not yet available).
• How long does a transfer take? 1-2 business days to most countries.
• How much can you send? Minimum of $1,000 with no max limit (however, some currencies may be regulated and may have their own limits).
• Fee to send money: OFX’s fees are extremely low when compared to big hitters like WesternUnion, MoneyGram and Xoom.

OFX has a much smaller service area than Xoom or MoneyGram, providing money transfers to only 56 countries outside of the US. Transfers also take longer, one to two business days in most countries. It’s big strength is that there is no max you can transfer — although you must transfer at least $1,000 at a time. In addition, OFX has extremely low fees. If you are sending large amounts of money that don’t have to reach the recipient immediately, the savings alone makes OFX an attractive alternative.