Currency Exchange
Currency Exchange
What is an exchange or currency conversion?
Exchange or currency conversion is a business that has the legal right to convert one currency into another currency and uses this legal right to convert different currencies for its customers. The act of converting physical money in the exchange (various types of coins and bills such as dollars, euros, pounds, yen, as well as digital currencies such as Bitcoin, Ethereum, Tether, Tron, Dogecoin, etc.)
It is usually done on a counter in exchange offices. An exchange office that performs such transfers for its own clients can often be found in various forms and even locations. For example, it can provide these services in the form of a small office with one employee, or even in the form of small counters and in the form of a chain in airports, or in the form of a large and international bank providing exchange services (currency exchange). Provide to customers.
Exchange services (currency conversion) can be accessed in the form of other businesses that offer these services online to their customers, including banks, forex brokers or other financial institutions. Exchanges earn profit either by adjusting the exchange rate and creating a spread or by receiving a fee or both of these cases during the provision of their services.
How these exchange offices work (currency exchange)
Exchange or currency conversion offices, whether physical offices or online offices, allow you to convert the national currency of one country into the national currency of another country through the implementation of buying and selling operations. For example, if you have some US dollars and want to exchange them for Australian dollars, you bring your US dollars (or bank card) to the exchange office and buy Australian dollars with them. The amount of Australian dollars you are able to buy in this deal depends on the spot rate of parity between the two currencies, which is basically a daily changing value determined by a chain of banks that exchange various currencies.
The exchange office or currency conversion, such as brokers, changes the exchange rate with a certain percentage and creates a spread between the purchase and sale price of the currency to make sure that a profit remains for itself on this transaction or purchase and sale. For example, let’s assume that the spot rate for converting US dollars to Australian dollars today is 1.2500, which means that for every dollar paid, the customer can buy 1.25 Australian dollars in case of spot purchase. It is But the exchange office may change this rate to 1.2000; This means that a customer can have 1.20 Australian dollars by spending one US dollar. With this hypothetical rate change, the fee received or profit earned per US dollar equals 5 US cents.
Currency exchange at the airport
Airports are generally one of the places where people buy the currency of the destination country or convert the remaining currency of the destination country of their trip to their own national currency on the way back. Since airports are considered the last port in terms of commercial and international law, the rates included in the exchange offices located in them are a bit more expensive than the exchange rates at the level of cities or even at the entrance of cities.
Traveling without carrying any cash is gradually becoming a common habit and style among travelers; Because nowadays, many banks provide their foreign exchange services for different and diverse currencies using only one bank card. Also, ATMs of foreign countries are also a reasonable option for banks with a global banking system. For example, the use of ATMs is easily popular in New York, London and many large Asian cities.
