[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

[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.

[nasu-dengaku.livejournal.com]

That exchange app is very doable and a good idea. Counterfeiting could be stopped or drastically reduced by having a reputaiton system (like ebay or couchsurfing)

I think they should have that for travelers' stuff in general. I'm going to donate my Lonely Planet Eastern Europe to the next hostel I stay at, but I'd rather give it to somebody who could use it right away.

Craigslist is far too clunky for this sort of thing. I want something that lets you post things wanted and things people want to get rid of, matches them up based on GPS, and lets you IM them.

[nasu-dengaku.livejournal.com]

PS get some funky colored hair. You know you want to.

[(Anonymous)]

I think your iPhone app has much higher side costs, like inconvenience, risks of robbery, etc. It doesn't save you any money if your become so sick of dragging your suitcase that you choose a taxi over a bus.

I've never used those exchange guys, I just budget about the right amount when I pull form an ATM, but I agree they are a blight upon the land. I always use an ATM or credit card since Visa charge only 1%; well assuming your informend enough to avoid banks that charge 3%, like FirstUSA, Wachovia, BoA, etc., I know CapitalOne charges only Visa's 1%.

I often leave with extra cash, but I just declare this a souvenir, or buy silly gifts. Serbia has Tesla and T = Wb/m^2 on their 100 Dinar (1 euro) note. If your low on money, then I can imagine wanting to convert the cash, but you're likely better at budgeting too.