With this era of fast money, the transfer of money across the world at a fast speed is as critical as ever.
In this piece, we compare Xoom vs PayPal by reviewing the strengths each has in transfer speed, transparency of fees, and security measures.
Our exhaustive review attempts to guide you through these choices and choose the one that will suit your international payment purposes.
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What is Xoom?
Xoom was established in 2001 by San Francisco residents Alan Braverman and Kevin Hartz.
Xoom specialized in digital remittances until it was acquired in 2015 by PayPal for $1.09billion, but it remains an independent brand.
What does Xoom do?
- International transfers to 160+ countries
- Bank deposits (direct to recipient’s account)
- Cash pickup options at thousands of locations
- Mobile wallet deposits in select countries
- Bill payment services (particularly utilities in Latin America and the Philippines)
- Mobile airtime reloads for international phones
- Cash delivery to recipient’s home in select countries
PayPal Background Information
PayPal was founded in 1998 as Confinity by Max Levchin, Peter Thiel, and Luke Nosek and was later acquired by Elon Musk’s X.com in 2000.
The acquisition helped turn it into one of the earliest and most popular digital payment systems.
PayPal was later acquired by eBay in 2002 and became independent once again in 2015.
What services do PayPal offer?
- Domestic and cross-border fund transfers
- Online business payment processing services
- Buyer and seller protection programs
- PayPal Credit financing facilities
- Buying, holding, and selling cryptocurrencies
- PayPal Business accounts with enhanced features
- E-commerce solution integration
Which has better rates, Xoom or PayPal?
How much are Xoom fees?
Xoom, owned by PayPal since 2015, has international money transfers with a fee model that is both a flat transfer fee and an exchange margin.
The transfer fee is upfront and differs according to the sending amount, recipient country, payment method, and pay-out method.
Usually, the range is $0-4.99 for small-value transfers disbursed out of accounts to $9.99 and more for disbursements paid through credit cards.
The main source of revenue for the service is the exchange rate markup, which is usually 1-3% over the mid-market rate.
The markup is currency pair-specific and hardly ever publicly disclosed, so it is hard for consumers to make an estimate of the total transfer cost.
For bigger transfers, the hidden fee is quite larger than the evident transfer fee.
Pay type also makes a huge fee difference, with credit card transfers charging Xoom’s higher transfer fees and possibly cash advance fees from the card issuer (usually 3-5% plus interest).
Bank account transfers are most inexpensive but involve 3-5 business days’ processing, and payment by debit card is a compromise between speed and cost.
Delivery options also impact cost, and bank deposits will typically be the lowest.
Home delivery and cash pickup activities are high-cost but offer convenient alternatives for non-banked recipients.
Delivery time by country is uneven, with some having same-day delivery and others 1-2 business days even for “express” delivery.
Although Xoom’s digital-first service and partnership with PayPal are convenient, its fee will generally be middle-of-the-pack compared with the money transfer incumbents.
To get a precise estimate, you can go to Xoom’s fee and exchange rate calculator.
How much are PayPal fees?
PayPal’s fee structure has both fixed and percentage fees that vary depending on the transaction type and where it is made.
Local payments from a PayPal balance or linked bank account are free and therefore perfect for paying family and friends.
Payments by credit card, however, cost a various percentage charge depending on the country (e.g. 2.9% or 3.4%) with an extra flat fee (e.g., $0.30 in the US).
Withdrawing to a bank account incurs fees in certain locations—mainly outside the United States and Europe—and debit card or bank transaction payments typically cost a 1% fee up to $10 in the U.S.
Additional fees are levied for chargebacks ($20), payment disputes ($15), and record requests (between $10 and $30).
On 13 January, 2025, PayPal increased its largest fee rise in a decade by raising processing fees for its Buy Now Pay Later (BNPL) facility to 4.99% and a flat fee, from 3.49%.
The 43% increase has made BNPL the most profitable payment option on the platform, surpassing standard credit card fees.
While PayPal pays for wide global coverage and convenience, the combination of percentage charges, flat charges, and exchange rate markups is costly for cross-border companies—particularly those accepting low-value payments.
Refer to PayPal’s detailed fee overview for precise estimates.
Which is better, Xoom or PayPal?
Xoom mixes PayPal’s electronic platform with remittance expertise, specifically targeting large remittance corridors to Latin America, Asia, and Africa.
The service sends tracking in real-time and SMS notifications to senders and receivers.
Bank transfers generally take minutes for large corridors, but some take 1-2 business days.
Its integration with PayPal enables instant transfers from PayPal balances, and it also accepts bank accounts, debit cards, and credit cards as funding sources.
PayPal is available in more than 200 countries and accepts 25 currencies and is one of the most widely available payment systems worldwide.
It facilitates near-instant transfers between PayPal accounts, and bank account transfers typically take 1–3 business days.
Its comprehensive Seller Protection program assists merchants with fraud risk management, and Purchase Protection aims to ensure buyers receive the goods or services listed.
Moreover, PayPal expanded its service range to offer point-of-sale offerings like PayPal Here and the ability to accept payments through QR codes.
This assisted in adding even more flexibility in both online and offline payments.
Conclusion
Our comparative analysis shows that although both Xoom and PayPal are strong in their capabilities, they serve different segments of the remittance market.
Xoom, with its fast service and localized touchpoints, is best suited for fast international transfers.
PayPal, on the other hand, uses its large network and inherent capabilities to offer a multi-purpose digital payment platform.
The optimal option will ultimately be a matter of your own transfer priorities.
Regular review and scrutiny of service updates are advised to ensure that your selected platform continues to meet your changing needs.
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
