TransferWise vs Xoom
Which one of these low-cost money transfer services should you choose when sending payments overseas?
Both TransferWise and Xoom offer lower fees than banks, but which one should you use to send money overseas? We compare the fees, exchange rates and speed to help you find the best deal.
The following fees and rates are accurate as of 24 July 2019.
Which has lower fees?
TransferWise calculates its fee based on the transfer amount, the currency being sent and the payment method. The result is a flat fee deducted from the amount you’re transferring.
For instance, the following charges could apply if you sent money to the US:
- $3.22 for a $100 CAD transfer
- $6.95 for a $500 CAD transfer
- $11.61 for a $1,000 CAD transfer
- $78.84 for a $10,000 CAD transfer
On the other hand, if you sent money to the Philippines, the following charges could apply instead:
- $4.91 for a $100 CAD transfer
- $9.15 for a $100 CAD transfer
- $14.45 for a $1,000 CAD transfer
- $93.20 for a $10,000 CAD transfer
Bear in mind that these are just examples based on information available at the time of this writing. Actual fees these fees can vary based on the details of your transfer.
Xoom’s fees vary and depend on the sending amount, the currency being transferred, the payment method and the location the money is going to.
Transactions under $200 CAD cost a flat fee (often between $2.49 and $4.99) regardless of how you pay. There are usually no fees for transactions at or above $200 CAD if you pay directly from your bank account. However, you will be charged a fee if you want to pay by debit or credit.
For example, if you sent money as USD (United States dollars), PHP (Philippine pesos) or INR (Indian rupees) and paid by either debit or credit card, the following charges could apply:
- $4.49 for a $200 CAD transfer
- $10.99 for a $500 CAD transfer
- $21.49 for a $1,000 CAD transfer
- $211.49 for a $10,000 CAD transfer.
It’s tricky to pinpoint a clear winner here, because it depends on how you make the initial payment. The fees both companies charge for small transfers are within a similar price range, and both companies scale up the price as the transfer amount increases.
TransferWise often has lower fees than Xoom, however, and this becomes especially pronounced when very large amounts are being sent. On the other hand, Xoom often offers zero fees for transfers above a certain amount if payment is directly from the sender’s bank account. In the end, the company with lowest fees comes down to the details of each individual transfer.
Let’s crunch the numbers: Sending $1,000 and $10,000 from Canada to the UK
Let’s see how TranferWise and Xoom compare when sending 2 different amounts from Canada to the UK. We’ll assume payment is by debit or credit card.
Sending $1,000 to the UK
|Exchange rate||1 CAD = £0.6097 GBP||1 CAD = £0.6033 GBP|
|Transfer speed||1 day||Within minutes|
|Total British pounds received||GBP£603.09||GBP£590.63|
|Receiver gets||GBP£12.46 more||GBP£12.46 less|
Sending $10,000 to the UK
|Exchange rate||US$1 = GBP£0.6097||US$1 = GBP£0.6048|
|Transfer speed||1 day||3-4 days|
|Total British pounds received||GBP£6,049.04||GBP£5,924.02|
|Receiver gets||GBP£125.02 more||GBP£125.02 less|
With lower fees and a better exchange rate, TransferWise is the more affordable option in this case. For a $1,000 transfer, the receiver gets GBP£12.46 more (around $20 CAD), and for a $10,000 transfer, the receiver gets GBP£125.02 more (around $205 CAD).
Which offers better exchange rates?
TransferWise is one of the few money transfer providers that offers customers the mid-market rate. So if, for example, you’re sending money to New Zealand and the mid-market rate works out at 1 CAD = 1.1135 NZD, that’s the rate TransferWise will give you.
Xoom makes a profit by adding a margin on top of the mid-market rate. For example, Xoom’s exchange rate for New Zealand is 1 USD = 1.1135 NZD, while the mid-market rate is 1 USD = 1.1344 NZD. In this case, the margin is 1.84%.
By offering the mid-market rate, TransferWise is a clear winner here.
Which is faster?
Paying with a credit or debit card means the money could be available to your recipient within minutes. However, some currencies and payment methods will take longer, and could take up to 4 days.
TransferWise says 90% of transfers from the UK to Europe happen within 1 business day. On the other hand, if you send $1,000 to Bangladesh, it will take up to 4 business days.
Xoom says the money will be available to your recipient within minutes. It can take longer depending on factors such as the country you’re sending it to, how you make the initial payment and how the money will be received.
If you send more than US$10,000, it will take another 2-3 business days on top of the normal processing time, while Xoom settles the funds with your bank.
Both TransferWise and Xoom offer payments within minutes, but times vary depending on the method of payment, the currency and country. In this category, it’s difficult to pick a clear winner.
|Payment methods||Receiving options||Minimum and maximum transfers||Transfer speeds||Currencies|
|TransferWise||Bank transfer, credit card, debit card||Bank account only||Minimum: $1|
|1 - 2 days||45+ currencies|
|Xoom||Bank transfer, credit card, debit card||Bank transfer,|
cash pick-up, home delivery
Maximum: Varies by country and account verification level
|Within minutes – a few days||130+ currencies|
Head to TransferWise’s website and choose the currency and amount you want to send. You transfer your local currency to TransferWise, and they transfer your recipient’s local currency out of their bank account in that country. At every stage of the transfer, you will be updated via email. You also have the option of using an app to track your transfer, or checking it through the TransferWise website.
After setting up an online account or downloading the Xoom app, choose the amount you wish to send and the currency, and where the recipient will access the money. Xoom offers a money-back guarantee if your transfer isn’t received. There is also 24-hour support, and you can track your transfers via text, email or online.
It’s a close call between these two international money transfer providers, and both have their advantages. TransferWise offers the mid-market rate with no added margin on top, while Xoom offers no fee if you pay by direct bank transfer. Ultimately what you choose depends on your payment method and the currency you’re sending, so make sure to compare a range of services before you make a choice.
Looking for more options?
Use our calculator below to compare fees, exchange rates and transfer speeds of leading international money transfer providers. Just enter the details in the calculator to see what fees and exchange rates you would get.
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