Wise (TransferWise) vs Xoom
Which one of these low-cost money transfer services should you choose when sending payments overseas?
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Both Wise and Xoom offer lower fees than banks, but which one should you use to send money overseas? We compare the fees, exchange rates antrand speed to help you find the best deal.
The following fees and rates are accurate as of 19 February 2019.
Xoom is not available in Australia
Unfortunately, you won't be able to sign up for an account in Australia unless you have a bank account in either the US or Canada.
Which has lower fees?
Wise charges a percentage fee as well as a small flat fee. For instance, if you sent $1,000 from the United States to the United Kingdom, you would pay US$6.90.
Xoom's fees depend on how you make the payment. Sending money from your bank account won't cost you anything. However, paying by credit or debit card will. For example, for a $1,000 transfer from the US to the UK:
- Fees when paying by bank account: $0
- Fees when paying by card: US$30.49
It's tricky to pinpoint a clear winner here, because it depends on how you make the initial payment. Xoom's fee is $0 if you use your bank account to make the payment, but if you pay by card, it can add up.
Wise has overall low fees, and the company has announced that it's changing its fee system on March 8, making most fees even lower.
Let's crunch the numbers: Sending $1,000 and $10,000 from the US to the UK
Let's see how TranferWise and Xoom compare when sending two different amounts from the US to the UK.
Sending $1,000 to the UK
|Exchange rate||US$1 = GBP£0.77340||US$1 = GBP£0.7728|
|Transfer speed||1 day||Within minutes|
|Total British pounds received||GBP£768.06||GBP£772.80|
|Receiver gets||GBP£4.74 less||GBP£4.74 more|
Sending $10,000 to the UK
|Exchange rate||US$1 = GBP£0.77340||US$1 = GBP£0.7728|
|Transfer speed||1 day||3-4 days|
|Total British pounds received||GBP£7,689.16||GBP£7,728|
|Receiver gets||GBP£38.84 less||GBP£38.84 more|
Which offers better exchange rates?
Wise 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 AUD = 1.035 NZD, that's the rate Wise 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 = 1.4687 NZD, while the mid-market rate is 1 USD = 1.46003 NZD.
By offering the mid-market rate, Wise 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 four days.
Wise 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 Wise 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|
|Wise||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 Wise's website and choose the currency and amount you want to send. You transfer your local currency to Wise, 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 Wise 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.
However, unfortunately for Australian customers, you'll only be able to use Xoom's money transfer service if you have a US or Canadian bank account.
It's a close call between these two international money transfer providers, and both have their advantages. Wise 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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