[travel] Wicked moneychangers

[mattbell]

Every city I've been to in Eastern Europe is full of small moneychanging booths. Most of them offer horrifically bad exchange rates but disguise these rates via confusing rate charts. Some of them take as much as 30% off of the transaction. If we assume the same number of customers, these shady shops pull in 10x as much money as the banks that offer the same services. Their cost of doing business is practically nothing – they just need to rent a tiny bit of real estate and pay one person to man the booth. Thus it must be an extremely profitable business... every few minutes a tourist comes in, and the exchange earns somewhere between $10 and $100. In these areas, where salaries are a fraction of what they are in the US, this is a lot of money. There are several of these things per block in touristy areas and there's never a line... I see them and wish the space could be put to better use other than as traps to fleece the uninformed.

While I am against regulation in a lot of areas (and my libertarian friends even more so) his is the sort of thing where I would rather have the government step in to prevent the formation of businesses that do nothing productive, hurt their country's reputation, and clutter up valuable downtown real estate. Of course the government curently stands to profit (at least in the short run) from these things, so they would lose some tax revenue when they are replaced by somewhat less profitable businesses.

Comments

[eccentrific.livejournal.com]

Well, there's the option requiring moneychangers to clearly state the exchange rate and how much they are skimming. After all, the libertarian theoretical ideal of lack of regulation is entirely based on the consumer having perfect information with which to make a decision. (Something of course which you cannot even begin to get close to without a lot of regulation... but much less invasive regulation than just shutting down certain practices)

[nasu-dengaku.livejournal.com]

PSA: This post appears to be especially popular with people who have funky-colored hair.

[spoonless.livejournal.com]

Somebody should make a Craigslist or an iPhone app that finds other people in your town who are interested in changing money the opposite way... then you could both do the exchange with zero fees!

Why hasn't anyone done this (or have they?)... it seems like a simpler solution than regulation, although maybe there would become a problem with counterfitting or something.