How do airport currency exchange windows stay in business?
- By
- Aparna Patel
- |
- 2 Aug, 2023
- |
They are convenient, well-branded, and trustworthy. Even an idiot (or first time traveler?) can easily get money there, whether or not they know the exchange rate is bad. A person with excess money may care more about the convenience than the poor exchange rate.
How do convenience stores stay in business when they charge much higher prices than supermarkets? It’s easy — they are selling convenience.
Similarly, airport money exchange counters are convenient, especially for people who trust cash more than electronic transactions (if I’m carrying cash it can get stolen, but it can’t be used to drain my bank account), or for people who don’t have good credit cards with reasonable foreign transaction fees. And there are still many places in the world where cash is preferred or is the only thing accepted.
If you’ve ever gone thirsty on a hot summer day when surrounded by street vendors selling bottles of cold safe water for cash-only you’d understand.
(Note: my analogy of convenience stores may not be globally applicable. Here in the US they are corner shops selling a small selection of merchandise at high prices, but they are easy to get to, don’t tend to have checkout lines, and are generally open 24 hours a day. Many are located at gas (petrol) stations.)
Many (e.g. Travelex) also allow you to pre-book your cash for collection at the airport. The rates are much better (seemingly their own online rate, which, while not in the top 10 today, is quite reasonable). This provides a profit stream for the company, while for the user it provides convenience (you’re hanging around there anyway) and peace of mind (collect potentially large sums of money somewhere secure).
Of course, the last minute travellers who don’t (have time to) plan provide a good revenue stream for them, and it’s a good idea to have some cash on arrival, though not as universally necessary as it was a few years ago.
Maybe some people end up with some spare cash when they leave a country for good. Their choices basically are:
- Keep those bills as a souvenir.
- Spend them in Duty Free.
- Exchange them at the window to reclaim those money at least partially.
Since Duty Free’s price policies rival those of exchange windows, it probably makes more sense to exchange your bills at airport’s exchange rate.
Using an ATM internationally may require some pre-planning that most people don’t do. As a savvy traveler, you probably already know what your bank is going to charge you for an international withdrawal, but I don’t think most people do. You may have notified your bank in advance that you’re traveling, so that they don’t suspect fraud when an international withdrawal comes up, but I’m sure many people don’t know that they need to do this, or just forget to.
Credit:stackoverflow.com‘
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