How to Choose the Right Foreign Exchange Office?
Choosing the right currency exchange office can allow one to save a significant amount of money at their greatest convenience. There are many elements other than the offered exchange rates that determine which money changer shop is better. It is important for one to take into consideration all of the various elements when choosing which exchange shop to go to. Some of the factors include the supply and demand for currency of the exchange office, the location of the exchange office, the services of the exchange office, and the trade policy applied by the exchange office. However, regardless of the factors listed above, it is crucial for one to first be certain that the exchange shop of choice is legitimate. This entails that the exchange shop possesses a license if it is located in a country that requires licensing for all money changers.
The supply and demand for currency is one of factors that exchange shops differentiate themselves by. Not all currency exchange offices are equal and some are in fact more active in a market for certain currencies than others. This is due to the supply and demand for each currency not being fully balanced and therefore money changers must replenish their stock by buying some currencies from wholesalers, while also reselling the currencies they have. All exchange offices manage a similar amount of popular currencies such as the euro and dollar, but they also usually differentiate themselves by holding a certain volume of a particular currency. This is due to either a trade strategy or agreements the shops have with particular agencies that will direct customers of the specialized currencies to their shops. As the volume of the specialized currency is different, so is the price applied. The cost often varies between currencies in all exchange offices, with a higher price applied for less popular currencies.
Location is a major differentiator between money changers and greatly impacts the type of currencies provided and their prices. Changing currency in a airport is the most expensive method of currency exchange. This is because the exchange office competition in airports is consolidated due to the high rent in airports. This therefore allows the few exchange shops present in airports to possess exclusive agreements to sell and buy currencies in airports and impose high rates. Additionally, if an exchange office is located in an unsaturated area and less of a tourist zone, the exchange shop has a competitive advantage and can generate high profits due to people having no other options of exchanging their money elsewhere in the area. Further, in an unpopular tourist area, the local currency will be cheaper due to the exchange shops need to buy foreign currency to serve its local clients. On the other hand, in highly condensed tourist areas there are often many exchange offices located near one another limiting their flexibility, resulting in all the shops providing similar currencies and rates. Overall, it is evident that if one desires to change their money in a prime tourist location they must be willing to pay more. In comparison, an individual who values saving money over convenience must be willing to go out of their way to exchange their currency in a less tourist populated area.
The demand for services also impacts the costs applied to the rates charged by exchange shops. If one would like to purchase their currencies with a credit card than they must go to an exchange shop that accepts credit cards and not only cash. Additionally, if credit card is used than transaction fees of around 2% will be paid to the banking network and these fees are partially incorporated into the rates offered. Finally, exchange shops that have a supply of newer banknotes will display slightly higher rates than shops who only possess a supply of older banknotes.
While majority of currency exchange shops market themselves by claiming they are commission-free or apply a no-fee rate, they are in fact not fully honest. Regardless of the strict regulations that exchange shops are subjected to, they still have the power to freely decide the amount of fees they will apply to each purchase or sale of currencies so that they can make profit. Thus, while they may market that they take no commission, they actually are as the commission is just now integrated into the rates they charge.
It may appear like a significant amount of research and time must be dedicated to finding the best exchange shop, which many may not have the time or desire to do. Luckily, with Cambiu users will no longer have to worry about spending a lot of time or effort finding the most suitable money changer for them. Cambiu’s service enables users to easily locate the best exchange shop in an area of their choice, while taking into consideration all the important factors discussed above. Cambiu also provides additional detailed information about the exchange shops such as customer reviews. This ensures users can make a well informative and accurate decision when choosing which exchange office is best for them based on their wants and needs.