Written By Jens
Ischebeck
Funding personal businesses from abroad and sending money to relatives and
friends living in Africa has become a valuable endeavor to individuals living
abroad.
Remittances back home have become so important that they are a lifeline for some homes in Africa. Funds obtained from family members overseas are used for important functions such as paying fees (e.g. education tution fees), rent and even food.
Fortunately, technological advancement across the globe has made international money remittance swift and efficient.
Today, you can send
money from USA or Canada in a matter of minutes, through online money transfer
platforms or digital banking.
You can also change multiple currencies without having to walk into a bank.
However, you might end up paying more money for remittance than you should,
depending on the remittance service provider. You should consider researching
and investigating the various remittance providers in the market for scrutiny
of pricing, exchange rates, and remittance timelines.
This guide provides an in-depth comparison between two money transfer service
providers for Africans, namely Xoom
and WorldRemit. It will look at how
convenient it is to send money to any African country from Canada and the USA,
or any other part of the world where the two money transfer service providers
operate (see also my popular article about sending money on mobile phones).
Find the Best Remittance Providers for
Africa
Days are gone when banks were the only available avenues for money transfer.
Today, a smartphone and remittance services from a reliable remittance
provider, are the tools you need for an instant transfer of your money. For
money transfers to and from Africa, we recommend Xoom and WorldRemit providers.
These are among the leading international money transfer apps across Africa. It
is safer to send and receive money with Xoom and WorldRemit from different
parts of the world. Money transfer through the two providers is faster,
especially when both you and your recipient have accounts with these service
providers.
The two remittance providers offer efficient services, with multiple payment
methods in over 100 countries across the world.
But which is the best remittance provider for your needs?
Which one is the cheapest and how reliable is each for transfers to and from Africa?
Check out our guide on
the merits and demerits of each of these service providers, and how each one of
them operates.
About Xoom
Xoom was founded in 2001 as a digital remittance service provider where clients
were given a chance to reload their mobile phones through top-ups, send money,
and pay bills for others or to institutions that they relate to across the
world. Today, Xoom allows users to use remittance services from Canada and USA
to over 131 countries, including those in Africa.
Xoom is owned by PayPal, which is a digital powerhouse when it comes to digital
transfer of money. In the recent past, Xoom has been rated as the best service
provider in terms of customer satisfaction for their effectiveness,
transparency of fees and exchange rates, and utility.
Pros
• Transparent transaction charges enabled by the Xoom online calculator.
• It offers coupons to clients after a given period.
• Relatively cheaper than most money transfer providers.
• No charges for large transfers.
• Extremely secure, with 128-bit encryption for data security.
• Xoom guarantees a refund of money lost or not received by recipients.
Cons
• All remittances are done online, limiting those individuals without internet
connectivity.
• A complicated verification process during sign-up and log in.
• Delayed delivery of money compared to other providers such as WorldRemit.
About WorldRemit
With headquarters based in the UK, WorldRemit was founded in 2010 as an online
money remittance service provider. WorldRemit was among the first remittance
providers that invested heavily in establishing a fully-integrated
mobile-to-mobile money transfer across the world.
WorldRemit offers remittance services in various forms, including mobile money,
mobile top-ups, money collection, and bank deposits. Their remittance services
are integrated with some of the world’s leading mobile money platforms such as
MTN in Africa and Asia and M-Pesa in Kenya.
WorldRemit continues to partner with financial and telecommunication
institutions across the globe. This is to ensure that everyone all over the
world has easy and affordable access to money transfer via mobile phones or
digital banking.
Pros
• You can transfer from as little as 1 US Dollar.
• Flexible transfer across the world, with over 140 active countries.
• High transfer speeds.
• It is the best option for the transfer of small amounts.
• It has an easy to use website. Signing up takes you directly to the money
transfer segment.
• Competitive currency exchange rates better than those for banks
Cons
• They have a limited maximum transfer threshold of 10,000USD, which is
extremely low.
• Complex transfer fees that vary with time.
• Have no expertise to offer advice.
• WorldRemit offers no support to businesses.
Xoom and WorldRemit Comparison
Different clients transfer money from diverse countries under diverse transfer
conditions, depending on various service providers. Although both Xoom and
WorldRemit will give you appealing encounters in your money transfers, looking
into the details of each will help you in identifying which one is the best for
your needs. They may differ in issues such as countries supported, pricing,
exchange rates, offers, and benefits.
Xoom and WorldRemit: Countries Supported
WorldRemit allows sending money to over 140 countries in the world. With its
expansion into Africa, WorldRemit enables Africans living abroad to send money
home to 39 African countries (as per July 2019). Among the African countries
where WorldRemit is supported include; South Africa, Nigeria, Kenya, Ghana,
Ivory Coast, Egypt, to name just a few.
In addition, a new hub
is opened in South Africa. Based on this new transfer hub WorldRemit allows
people in South Africa to send money directly out of their country.
You can send money directly via your credit or debit card from the USA to the
African countries where WorldRemit is supported.
Xoom, on the other hand, is supported in over 60 countries across the world.
You can send money from your bank account in Canada or the USA to any of these
countries via Xoom. These countries include Ghana, Nigeria, South Africa,
Kenya, and India.
Recipients of Xoom remittances can receive the transferred money through their
bank accounts, via collection locations, or by having the money delivered at your
house.
Xoom and WorldRemit: What It Will Cost
You to Transfer Money Internationally
For both services, there is a transaction cost that is charged for every
transfer. The transfer fees vary with various factors such as the payment
method used, the total amount being transferred, the destination currency, and
the destination country. The two service providers offer clients with an online
calculator where they can verify exchange rates and total amount per
transaction.
WorldRemit is relatively cheaper than Xoom in terms of transaction costs. With
all the other factors remaining constant, it will cost you 3.99USD to transfer
1000USD using WorldRemit, as opposed to Xoom’s 4.99USD fee. WorldRemit, also,
offers a fee-free first transaction to new subscribers.
However, Xoom offers a fee-free transaction to customers who make large
deposits. Transactions are free for PayPal account holders who transfer money
to recipients who also own PayPal accounts.
How Good are the Exchange Rates Offered
How good a service provider is in terms of offering excellent exchange rates is
determined by the provider’s exchange rate margin over time. This margin is the
variation between what the service provider offers and the mid-market exchange
rate listed by Google.
Although their exchange rates vary from currency to currency, both Xoom and
WorldRemit operate within the same margin of 0.7% to 3%. The currency
calculators offered by the two providers help you in determining the exchange
rate, which is paid on top of the transfer fee and the money being transferred.
Xoom and WorldRemit Comparison
Conclusion
Avoiding high transaction charges is equally as important as the need to have
your money safely delivered to your loved ones. To ensure that you get the best
out of money transfer, you should analyse the various remittance providers
before considering buying their services.
Xoom and WorldRemit are world-class money transfer platforms. They both have
equal capacities to transfer your money to your home country. However, their
strengths, transfer speeds, and efficiency are different.
Based on your money transfer needs, you should evaluate every aspect of each
provider to determine which one best suits you.
Apps-for-money-transfer.com is the popular African money transfer apps
site and guides you through the process of finding the best suitable provider
for you.
Author bio: Jens Ischebeck is an Africa focused website publisher. The main sites are apps-for-money-transfer.com and Bitcoin-Guide-Africa.com (both cover the international money transfer tools for inward and outward remittances) and distance-education-guide-africa.com (online studying and e-learning).
