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Moneygram ODL but highest fees?


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28 minutes ago, QWE said:

Sure, I don’t mind at all. Just bear with me through this long answer.

So then you would say that the total fee is between 15 and 90 bps, which sounds in line with my previous estimate even if that was in the upper bounds of that range. Your methodology seems solid so I see no reason to doubt your figures.

I remember Moneygram somewhere stating that they are selectively applying ODL depending on if the transaction is competitive compared to their alternatives. It would be interesting to see how the total fee for transacting ODL in the MXN/USD corridor develops as volume increases - it should go down in theory.

Thanks for your explanation, good work!

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I'm building a website to calculate the costs of transferring money via ODL from Bitstamp to Bitso (USD -> XRP -> XRP -> MXN), but unfortunately it is not really ready to put it up for public

Howdy Q I've been (on and off) working on something similar, logging my progress in another thread. I've noticed the baseline cost of just the slippage ranging from 1.8 % to 0.12 % for amoun

Another thing is just because they are using ODL doesn't mean that 100% of transactions are moving through ODL. I don't have the link off hand, but I think it was only 1% of their transactions to thos

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1 hour ago, opaopa said:

So then you would say that the total fee is between 15 and 90 bps, which sounds in line with my previous estimate even if that was in the upper bounds of that range. Your methodology seems solid so I see no reason to doubt your figures.

I remember Moneygram somewhere stating that they are selectively applying ODL depending on if the transaction is competitive compared to their alternatives. It would be interesting to see how the total fee for transacting ODL in the MXN/USD corridor develops as volume increases - it should go down in theory.

Thanks for your explanation, good work!

 

Thanks! I think selectively using ODL is the best option right now.

 

One of the online stores I am regularly using gives me an option between two courier services every time I order stuff. Sometimes, courier 1 is cheaper, other times courier 2 has the lowest prices. This gives me the option to choose the best (cheapest) shipping method each time.

 

If I was Moneygram, I would love to have two options available to me to transfer money internationally. I think the fee varies too much at the moment for ODL to win against traditional rails every single time. This brings me to my next point:

 

6 hours ago, iLeeT said:

I think people that expect extremely low fees by MG just because they use ODL are in for a surprise. Even if 100% of their volume goes through the usd-mxn corridor and even if it costs them times less than before - they won't just simply lower the fees much. They'll lower them just enough so they can start stealing customers from competitors e.g. WU. The rest will purely be a profit.

Down the line, if a lot of other providers start using ODL (or any other methodology that'll save them money) we'll start seeing lower and lower fees, that's what competition does. But since MG is pretty much first, I don't expect them to lower their fees much, even if they transfer money for a penny.

 

I completely agree whit what iLeeT wrote and would like to add that right now, it would be nearly impossible for Moneygram to quote lower prices on their website. Live ODL fees are changing from 15 USD to 90 USD in mere seconds (for 10,000 USD). Would they have a live feed for the fees online, scaring away customers by flashing random numbers between 15 and 90 USD five times a second? Nah.

 

Would they gradually lower transfer fees over time, as ODL saves them transfer costs? Seems far more likely.

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On 12/15/2019 at 1:08 AM, Tinyaccount said:

This is a typical antagonistic-to-XRP,  unthinking,  simplistic response.  There are other possibilities and it isn’t hard to understand the true situation.

They only have a small percentage of a small number (maybe only one) corridor operating on ODL.  If you think that should lower their overall costs then business isn’t your strong suite.

Not really, the CEO stated he could pass on any savings or increase margins for shareholders, the latter appeared to hold more emphasis during the interview. Assuming the sector exhibits cartel-like behaviour, you will likely see fees held constant as profit share increases.   

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On 12/16/2019 at 6:48 AM, iLeeT said:

I think people that expect extremely low fees by MG just because they use ODL are in for a surprise. Even if 100% of their volume goes through the usd-mxn corridor and even if it costs them times less than before - they won't just simply lower the fees much. They'll lower them just enough so they can start stealing customers from competitors e.g. WU. The rest will purely be a profit.

Down the line, if a lot of other providers start using ODL (or any other methodology that'll save them money) we'll start seeing lower and lower fees, that's what competition does. But since MG is pretty much first, I don't expect them to lower their fees much, even if they transfer money for a penny.

If the behaviour is cartel-like, they won't steal customers. They will divide the market and both have high margins.

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