International Transfer Service Saving Clients 2-3% on Wire Transfers Vs. Traditional Banks
Stories Continue of Clients Saving Big Sending Wires with Midpoint Holdings (TSX-V: MPT)
Yesterday, Midpoint Holdings (TSX-V: MPT) closed up 14.3%, reaching 0.32 cents on increased volume while nearing its year-to-date high of 0.335. The action in the stock came again after a report from www.moneytrendalert.com illustrated how a new client of Midpoint saved 2-3% on international wires. Midpoint seems to focus its efforts on high-networth individuals, as they provide the same service for a $1,000,000 wire, as they do a $2,000 wire, however, with 2-3% potential savings, the company may also see growth potential from smaller international transfers.
For readers who are unaware, in a previous article we outlined how Midpoint Holdings removes the internally-priced bid/ask spread between fiat currencies set by banks, instead exchanging currencies at the midpoint, while charging 0.3%. This creates a cost structure that the company claims is the lowest in the industry for wires that exchange fiat. The example given in the report claims that one new client saved $690 USD on $29,874USD worth of wires to Mexico, compared to his normal bank rates, while also earning Avios points. From Money Trend Alert:
“For the condo fees, the recipient bank had to receive at least 73,033 Mexican pesos. With Midpoint, $3,270.92 is being sent, 250 Avios points are awarded, and the client is being charged $16.35 USD for the transaction. If the client sent the wire normally, he would have to send $3,386.30 USD including the bank’s exchange rate and a $30 flat fee on foriegn currency transfers. By using Midpoint, the client is saving 3.01% on the small wire transfer, amounting to $99.03, plus whatever value is placed on the 250 Avios points, easily confirming our math that all wires above $2,000 usd are worth sending with Midpoint.
The second wire for the car purchase hasn’t been sent yet, but the client did receive quotes. Using Midpoint, $26,603.13 USD must be sent, 2037 Avios points would be awarded, and the client would be charged $133.02 USD for the transaction. If the client sent the wire normally, he would have to send an estimated $27,327.79 USD including the bank’s exchange rate and a $30 flat fee on foriegn currency transfers. Therefore, the client would save 2.21%, or $591.64 USD on the wire by using Midpoint, plus whatever value is placed on the 2037 Avios points.
The total savings for the client on the two wires is $690.67, and 2,287 Avios points.”
A few new small clients and transactions of this size won’t affect Midpoint’s overall revenue and the company’s potential for growth and success will ultimately be determined by the effectiveness of their client acquisition strategies. However, with savings like these, it might only be a matter of time until large international businesses that transact in multiple currencies decide to try Midpoint’s service. A few of those Business to Business clients could change the company’s overall valuation by multiples of where it’s currently valued at +/- $13 million CAD.
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