Xoom vs. Western Union: What’s the Difference?

For those needing to send funds to faraway places fast, Xoom (XOOM) and Western Union (WU) both offer viable money transfer options. Founded exactly 200 years apart, the two companies offer similar services, but with significant differences in the way funds can be sent, the destinations they can be sent to, and the recipients eligible to receive them.

Founded in 1851, Western Union (WU) has been in the money transfer business for more than 150 years, originally operating by the then-novel telegraph (the internet of its day). As of 2019, the Colorado-headquartered company’s network includes some 500,000 agent locations and 213 countries and territories across the globe.

Customers can arrange for transfers by phone, online, in-person, or from more than 100,000 ATMs worldwide. Recipients can have funds deposited into a bank account, or pick up cash at a WU location.

Western Union also offers money orders for purchase and bill-paying services.

Xoom (XOOM) came on the scene in 2001. PayPal acquired the San Francisco-based company in 2015. Its international money transfer service is available in 131 countries, as of 2019.

Customers can only send money online using their mobile phone, tablet or computer. Recipients generally have funds deposited into a bank account, though cash pickup is available in many nations where Xoom has partners, as is door-to-door delivery.

Xoom also offers bill-paying and mobile phone-reloading services.

Along with the number of countries they serve and the methods for sending funds, Western Union and Xoom are distinguished by several other factors.

For the most part, Xoom offers lower prices on international money transfers than Western Union. Xoom can charge lower fees because it does not have the overhead of maintaining physical centers like Western Union.

Keep in mind that both Xoom’s and Western Union’s fees vary depending on your country, the country to which you are transferring money, your funding source, the payout currency and the overall transfer amount. The majority of Xoom’s transactions are sent to Mexico and the Philippines, funded from a bank account and disbursed in local currency. For those transactions, the customer pays a flat fee of $5.99 to $15.99 (if using a credit or debit card) to send any amount up to $2,999. Customers transferring money to Mexico or the Philippines from Western Union can expect to pay higher fees using the same funding methods, up to $19.99 per transaction.

However, Western Union may offer better exchange rates. In May 2019, for example, a $600 transfer to Mexico would net the recipient 11,233 pesos via WU, and only 11,083 pesos via Xoom.

If you need to transfer money to a business, you’ll have to go with Western Union. Xoom only allows consumers to transfer to other consumers (family and friends), whereas Western Union offers both consumer-to-consumer transfers as well as business transfers and bill-payment services.

With Xoom, customers can only transfer money from a bank account, debit or credit card, or a PayPal account. Because Western Union has physical locations staffed with agents worldwide, it accepts cash for money transfers. If you or your recipient doesn’t have a bank account, Western Union is probably the better bet. 

Although Xoom promises instant transfer in certain countries, the company often has very little control over the actual delivery to the recipient’s account. That’s because processing times depend on each individual bank. On the other hand, Western Union can ensure quick delivery because it has its own agents across the globe.