Earlier transfer money used to take place in person when paper money was handed in person, as there was no digital or plastic money available.
But after the introduction of digital money and plastic money, the transfer of it becomes quite easier as now people don’t need to meet in person for the exchange.
They can transfer using some of the technology that can be connected to their bank directly or have their bank (Paytm bank).
Examples of such platforms are PayPal Xoom, and Transferwise, both of which are used for transferring money online. Despite their same function, there are several differences between them.
- PayPal is the oldest and most widely used platform for online transactions.
- Xoom is a service that provides money transfers, and mobile reloads to various countries worldwide.
- Transferwise offers faster and cheaper money transfer options with mid-market exchange rates.
PayPal Xoom vs Transferwise
PayPal offers international money transfers through its platform and charges a fee of 5% of the transaction amount, plus a fixed fee based on the currency being sent or received. TransferWise offers competitive exchange rates and charges a small, transparent fee based on the amount being transferred.
PayPal acquired Xoom in 2015, which was first started in 2001 for transferring money. Examples of countries where this can be used for transferring money are China, Mexico, India, Pakistan, etc.
It offers several payout options, including the cash payout option, which several similar platforms still do not offer. It has a better fee structure and transfers money faster.
It also adds markups to the exchange rate, and there is less transparency.
Transferwise was founded in 2011 in order to make a platform for easy money transfer with better fees and a fair exchange rate. It offers transparency to its user with better fees and other functions.
Many users over other platforms prefer it. It offers several payout options. It has added a new feature of multi-currency accounts and wise debit Mastercard.
|Parameters of Comparison||PayPal Xoom||Transferwise|
|Exchange rates||Not as better as wise||Fairest exchange rate|
|Locations||Larger distribution||Covers fewer locations|
|Transfer time||Faster||Comparatively less fast.|
|Payout||Offer cash payout||It does not offer cash payouts|
What is PayPal Xoom?
The final amount after the exchange rate of markups and fees will depend on several things, some of which are:
- The transaction type.
- Payment method along with the currency used for the transaction.
- The amount that is transacted.
- The location or country was the transaction is done.
- In which currency the recipient is receiving the money.
PayPal Xoom is used more because it is accessible to more locations; it is used or can be used in more than 100 countries.
The transaction can be completed within seconds to a few days as it might depend on the currency of money used for transactions. And it offers a cash payout option along with other options as well.
Pros of PayPal Xoom:
- It is secure.
- It is faster.
- It is supported in around 160 countries.
- Several delivery methods and transfer options.
Cons of PayPal Xoom:
- There is limited transfer.
- Additional fees can be higher than others.
- Delivery might take additional time.
- Poor exchange rate.
What is Transferwise?
It is transparent when it comes to their exchange rates, and their fees are determined by the following:
- The amount that is being transacted.
- The payment method used for the transaction.
- Located or country where the money is being transacted.
Wise is not supported in several locations. It is accessible in around 59 countries, but they are preferred the most in those countries. It transfers money securely and low cost.
For payouts, the most used method is bank transfers, and there is no option of cash and check payouts for any currency.
Its users like it due to its transparency and better exchange rates. It offers higher security for transactions in any currency.
Pros of Transferwise:
- It is faster.
- It is simple to use.
- It is cost-effective.
- It is secure.
Cons of Transferwise:
- Not available in many countries or locations.
- It charges a little high fee.
- It does not have cash or cheque as a payout option.
Main Differences Between PayPal Xoom and Transferwise
- If a comparison in terms of fees is made, PayPal Xoom is slightly better due to their beneficial rates, while Transferwise is relatively less beneficial. But one advantage of Transferwise is that there is no additional markup on the exchange rate along with the fees.
- Transferwise is a better choice when it comes to exchange rates. Due to its transparency policy also makes it a more cost-effective option, whereas there is some additional markup on the exchange rate. In general, there is no transparency of its exchange rate markups, making it very complex.
- There are many places in the world where everything won’t work, especially when it comes to technology and innovation. In the case of Transferwise and PayPal Xoom, this is also an important difference, as PayPal Xoom can be used in several locations that exceed 70 countries, whereas Transferwise cannot be used in many countries. They are used in less than 60 countries.
- While in comparison of transfer time, there is a slight difference. PayPal Xoom is slightly faster as it can transfer money in seconds from one person to another, whereas Transferwise might use a few extra seconds than PayPal Xoom to transfer money.
- One of the main advantages of PayPal Xoom is the option of cash payouts. This option allows cash pickups as a payout option, whereas although transferring money with Transferwise is convenient and easy, it does not offer cash pickups as a payout option.
- Although Xoom was founded earlier, together with PayPal, Xoom was formed in 2015, which was later the introduction of Transferwise, which was introduced earlier in 2011.
I’ve put so much effort writing this blog post to provide value to you. It’ll be very helpful for me, if you consider sharing it on social media or with your friends/family. SHARING IS ♥️
Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.