Exchange Rate & Fees
Xoom grew its business by being upfront about fees. When transferring money, you have the option of viewing what you’ll pay. By clicking the ‘Show Fees’ link beneath the currency exchange calculator, you’ll see what it costs for each method. In that sense, it’s similar to other popular services like TransferWise. But you might want to gravitate towards no fee services like FairFX, OFX, WorldFirst or CurrenciesDirect.
Xoom’s fee schedule varies for each currency pairing. In general, cards are charged 5% for transfers of $100, and around 3% for amounts $200 and up.
For most countries, bank transfers cost $4.99 for amounts up to $999 – there is no fee for $1,000 and up. However, for other countries (e.g. Mexico), the $4.99 fee remains in place no matter the size of the transfer.
Xoom publishes the exchange rate that it charges for each currency pairing beneath the exchange calculator. According to our analysis, there is a margin of 1.75%-3.7% for small transfers (e.g. $200), and 1.5-3% for transfers of more than $1,000.
There is no minimum transfer amount specified. However, there are maximum transfer limits on Xoom, and they can get complicated. The maximum you can send depends on three things: time frame, documentation, and your country of residency.
With minimum documentation, an American resident can send $2,999 per 24-hour period, $6,000 every 30 days, and $9,999 every 180 days. Under similar circumstances, a Canadian resident can ship $C999 per 24-hour period, $C5,000 every 30 days, and $C9,999 every 180 days.
However, if you supply documentation including (but not limited to) the following – utility bills, bank statements, driver’s license, passport, and PR/Green Card – you can send considerably more. Americans can transfer money abroad in the volumes of up to $100,000 and Canadians $80,000 per 180-day period if they have their documents in order.
Xoom may be a cost-effective way to send money in comparison to its competitors dealing with remittances from the USA, based on the Remittances Prices project by the World Bank. Xoom is often showing up among the cheapest options and rarely as the most expensive option for remittance transfers.
With that being said Xoom is still excessively expensive when it comes to transferring money abroad to a bank account in a country like the UK, Australia or the like. Regardless of high fees, the margins taken from a larger transfers of 1.5%-3% is twice or thrice of what companies specializing in bank-to-bank transfers (such as Currencies Direct) would take.
Here is a recent example from Feb 28, 2019, demonstrating an unreasonably high margin of transfer of funds from the USA to Australia:
The real rate at the time was 1.4072 so that represents a margin of 3% by itself, not inclusive of fees.