Xoom review: What you should know before you sign up

Xoom offers a simple and effective money transfer experience, despite being limited to those residing in USA and Canada.

Xoom has been around for quite some time. Sharing much of its DNA with the parent company that now owns it, the service is relied on by many for quick and painless international remittances.

With a well designed online experience and complementing mobile apps, Xoom has a wealth of resouces to drive new customers to their product and present them with a memorable experience.

But do they deliver on their promise to make international money transfer a breeze? To learn more about their capability and to see if their service is right for you, read on for my in-depth review of Xoom.

 

 

1. Company history and founding story
2. Supported currencies
3. Exchange rates and fees
4. Transfer speed
5. Key features
6. Customer service
7. Security and regulation
8. Reputation
9. User experience
10. Conclusion and final thoughts

1. Company history and founding story

Xoom was founded in 2001 by Kevin Hartz as a way for immigrants to send money abroad. Using its close ties with PayPay (the two companies shared common investors at the time), Xoom was able to its grow its business by being better, cheaper and faster than its competitors. Operating from their office in San Francisco, the service was completing almost $2 billion worth of payments by the end of 2011.

After relying solely on venture capital for many years, Xoom was listed as a publicly traded company in 2013. Then in 2015, after only two years of being traded on the NASDAQ, Xoom was acquired by PayPal for $1.09 billion. This bought Xoom into line with  handle international remittances of behalf PayPal’s customers, while the PayPal service itself is more adequately reserved for domestic payments.

Xoom’s operations have been overseen for many years by John Kunze, who is Vice President of Global Consumer Products. Jasmine Lee is Chief Financial Officer, and Julian King is General Manager. Brent Williams is VP of Payments, who works alongside Bobby Aitkenhead as VP of Bill Pay, and Michel Kattan as Marketing Director. Since Xoom was acquired by PayPal in 2015, the division has, of course, been supported by the group’s CEO, Dan Schulman.

2. Supported currencies

Xoom supports the transfer of 95 currencies, leading to a total servicing of approximately 130 countries. For the most part, the company facilitates its transfers using the SWIFT banking network, which provides it with the ability to deliver funds to many corners of the globe. The downside to this network is there are often charges incurred by the recipient, of which Xoom has little control of.

Xoom does not have a minimum transfer value, but maximum values will vary; the amount of which depending on the destination country and the method of transfer. Single transfers are limited to a maximum of US$ 10,000, and additional restrictions are placed on aggregate transfers over a period of time, such as limits of US$ 25,000 in 24 hours, US$ 50,000 in 30 days and US$100,000 in 180 days.

Sending limits are calculated base on several factors, such as your transaction history, how the funds are to be received, and restrictions depending on delivery country. And finally, in addition to bank transfer, Xoom supports cash pick up to selected destiantions around the world.

3. Exchange rates and fees

Before committing to using a currency transfer service, it’s important to understand its business model. Put simply, a company like Xoom typically generates revenue in two ways. Firstly, it may charge a transaction fee for executing each transfer. Secondly, it may also take a margin on the exchange rate provided to its customers, also known as the “spread”; which is the difference between the exchange rate of the wholesale market (i.e. the interbank rate), and the exchange rate offered to the customer.

When comparing the pricing of Xoom against traditional banks, the company fares very well. Banks typically charge a large transaction fee and a 5% margin on the total value of the transfer. Xoom, on the other hand, charges a small flat fee of only US$ 4.99. The exchange rates are also much more competitive than traditional banks; averaging between 2.49% of the total amount transferred for small values ($200), and 0.91% for larger values (US$ 10,000).

When comparing Xoom to other specialised currency transfer services, it stacks up pretty well. While companies such as TransferWise (review) and CurrencyFair (review) don’t take a margin on the value of the transfer, and rather they provide their customers with the mid-market rate, they do charge a larger fee to compensate; amounting to approximately 0.50% of the transfer value for TransferWise, and even less for CurrencyFair. Even though Xoom doesn’t provide the mid-market rate, its rates are not too far away.

As a case study, let’s compare Xoom against its competitors when transferring US Dollars (USD) into Australian Dollars (AUD):

As you can see, there is certainly some benefit to using Xoom. With its ability to provide flexible payment arrangements into hundreds of countries, it does provide reasonable value, but may not always be suitable for large amounts.

4. Transfer speed

The speed of Xoom’s services vary greatly depending on the method of delivery selected. Transfers initiated via cash pick up are completed almost instantly, while bank transfers usually take between 1 – 3 business days to be fulfilled. Whichever  method you choose, paying for your transfer with debit or credit card will ensure the quickest route possible.

5. Key features

What are the key features of Xoom’s online platform? Let’s take a look at the various payment services offered by the company.

Spot contract. A spot contract consists of a single payment from one currency to another at the currently available exchange rate. If you need to send money right away, simply log in to the Xoom website or app, and with a couple of clicks, a transfer can be arranged. Unfortunately, at this stage, this is the only type of payment that Xoom can facilitate. As a result, anything resembling the more advanced features offered by other currency transfer services, such as scheduled payments or conditional orders, are not possible.

6. Customer service

In addition to Xoom’s headquarters in the United States, the company also has regional office in Guatemala. This office is used to provide assistance to its Latin American clientele. Their customer assistance team can be contacted by phone or email.

+1 877 815 1531
customersatisfaction@xoom.com

In my experience, I found the Xoom customer service staff to be friendly and helpful. I did not have to wait too long to speak with someone on the phone, and my queries by email have been answered in a prompt and professional manner.

7. Security and regulation

Is Xoom safe? Let’s take a look at the various initiatives adopted by the company to ensure the security of its customers.

Government regulated. As Transfast is headquartered in the United States, the company is regulated by FinCEN. In addition to this broad sweeping regulation, the service claims to hold financial services licenses in over 70 jurisdictions.

Customer funds held on trust. In accordance with the standards imposed by government regulators, the funds of Xoom’s customers are held in segregated accounts and are therefore kept completely separate from the company’s own operating accounts. This ensures the security of customer funds, should Xoom encounter financial difficulties.

Website security. The Xoom website is protected with TLS encryption, which prevents sensitive data from being intercepted during your visit. You can confirm that this is in place by recognising a green padlock next to the website’s URL on your browser.

8. Reputation

Can you trust Xoom? Let’s take a look at look at some of the key factors which affect the company’s reputation.

Trustpilot. As of publication, Xoom has received 7,330 reviews on Trustpilot with an average rating of 5 out of 5 stars; representing a positive experience in 88 percent of interactions with its customers

Here are some of my observations on the feedback posted:

Social media. Upon viewing the Facebook and Twitter feeds of Xoom, we can see that its employees reply promptly to queries raised on these platforms. Most interactions are quickly moved offline, where any query can be delt with discreetly. The remainder of Xoom’s posts revolve around reminding thier customers of the benefits of using the service.

We’re sorry to hear that. Please DM us your Xoom email so we can assist you.

— Xoom.com (@Xoom) December 14, 2018

Mainstream media. As for the mainstream media, their reporting on Xoom has generally been positive. Much of the their coverage surrounds the company’s recent expansion into Canada, as well as a new marketing campaign involving Usain Bolt.

Usain Bolt named global brand ambassador for money transfer service Xoom. The Drum

Xoom Expands Full Suite Of Send Services To Canada. PYMNTS.com

9. User experience

Design. The Xoom website has been designed thoughtfully, with special attention being paid to user experience and simplicity. It is available in 6 languages; English, Chinese, French, Portuguese, Spanish, and Vietnamese. In addition to its online platform, Xoom has also developed mobile apps for both Apple and Android devices.

Registration. The registration process is very quick. All you need to do is enter your name, email address and couple of identifying details. Alternatively, you can sign up with your PayPal account. The entire process takes a minute or two.

Identification. No identification is required to make initial transfers up to $2,999. If you’d like to send amounts up to $10,000 in any one 24 hour period, you’ll need to provide additional details such as a social security number or passport. To increase this amount to $25,000, you’ll need to answer a range of security questions and provide proof of funds, such as a pay slip or bank statement.

How does Xoom work?

To familiarise you with the Xoom service, I’ll take you through a transaction I completed with them recently. If you need some guidance in navigating your own account, you can follow along.

Step 1. Visit xoom.com and log in. Once you have entered the Xoom website, you are greeted with a relatively minimal interface. To begin a transaction and add your first recipient, click Get Started.

Step 2. Decide if you would like the funds to be delivered to your recipient by bank deposit or cash pickup.

Step 3. Select the method in which you would like to pay for the transfer. There are three options available; bank transfer, debit or credit card.

Step 4. If you are sending money to a bank account, now is the time to enter the receipent’s bank details. If, instead, you decided to deliver to a cash pickup location, you’ll be prompted to select from a prepopulated list of options.

Step 5. Add the specific details of your receipient, including their name and address.

Step 6. Next, it’s time to add your own contact information.

Step 6. Now is the time to organise payment. If you elected to pay by debit or credit card, this is the fastest method of transferring funds to Xoom. Otherwise, bank transfer will do just fine.

Step 6. A summary of the quoted transaction is provided for your review. Once you are sure you want to confirm and proceed with the transaction, click Authorize Payment.

Step 8. Once your transaction is confirmed, it is time for Xoom to get to work and begin processing your payment. You can track your transfer online or with their mobile app. Additionally, throughout the process, you will be provided with email updates as the payment moves within the system.

All done! Finally, once the transfer has been completed, its status will be updated accordingly and the payment will be reflected in your recipient’s account shortly. In my experience, the Xoom online platform was simple to use and clear instructions were provided. Unfortunately, I was not able to complete a full test of the service, as I do not have a presence in the United States.

10. Conclusion and final thoughts

Xoom’s money transfer service is leveraged using the size and scale of its owner, PayPal. As a result, they are able to offer an simple and efficient platform for cross-border payments. Although I wasn’t able to personally test the service with a transaction at my own, it seem that their service works relatively well. At least the ability to make a low-value transaction without providing identification is incredibly convenient.

Whilst it’s use is limited to residents of the United States and Canada, Xoom does a pretty good job for those needing to move money quickly. Admittedly, it’s fees aren’t quite as low as a service like TransferWise, but it does punch well above many of its remittance peers, such as Transfast and Remitly. So all in all, if you are looking for an easy to use money transfer service that won’t break the bank, Xoom is not a bad option at all.

Our rating: 4 stars