Money exchange Business is very old and legitimate business, traditionally it was done physical counters, now like many prominent services this has also moved to online, ever since the business has moved online the layman consumers have more data and more options to choose from, as there are numerous service providers in the market which charge different fee for their services depending upon their business models.
These businesses deal in every form of money be it coins, cash or paper bills. And these Money Exchange businesses work in all the possible forms, from a stand-alone online portal, standalone physical kiosk to a physical or online chain. Venues these physical booths operate in are also varied and their charges also vary from location to location, the same service provider may charge a different on an airport and different fee at their mall booth.
There are so many banks and non-banking finance companies which also offer currency exchange services with their existing offerings with discounted charges, that makes their existing offerings look comprehensive as well as they make profits.
The Business Structure of Money Exchange
These businesses make money either by holding currencies or they simply charge for their services. Though it’s called exchange but technically Money Exchange is not just the exchange of money or currencies, it goes through the process of trade, a buyer buys a currency on an existing spot rate (a value assigned to a commodity by consensus of all the financial institutions which has stake in the transaction, the value is volatile, it changes on day to day basis) and seller sells the desired currency a buyer wants on the spot rate.
But there’s more ton it, the final transaction does not take place on the spot rate, after the consensus the role service providers come into play; buyers and sellers, the service providers modify the rate in a way that they get some profit on each transaction they facilitate. As the transaction does not take place on the spot rate, consumers get chance to revaluate their decision, either they want to go for Money Exchange or they are willing to pay an atm or credit card fee at foreign destinations to withdraw local currencies.
The service charge that credit and debit card providers charge is way higher than the platforms which offer money exchange. The reason all the travel agencies advise their customers to have guestimate how much money they are going to spend on their visit, so they can easily manage the required currency in the required form.
The Economical Exchange; Physical Booths
Online Money Exchange portals are relatively new in comparison to physicals kiosk, the reason being they charge hefty exchange charges, as there is very little competition. So If a person is travelling to a foreign destination and wants to exchange the currency, then it is always advised the travellers to locate a physical booth to exchange the currency according to the guestimate they have had about their potentials expenses.
If not travellers can find exchange booths on all the international airports, and the airports are probably the last physical port where the travellers can exchange their currencies, though the charges at airport are relatively higher than other physical booths, but it always advised to the travellers if they are looking for the exchange from a physical booth in a foreign country, they should exchange their currency, before entering to the mainland of the country because the laws and prerequisites of exchange can vary from country to country, and travellers may find it difficult to get the local currency from the mainland.
With ever-increasing cashless economy completion in the banking sphere of Money Exchange also likely to increase, the cost attached to it also bound to go down, some banks have already chipped in with free exchange, good times to follow !
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