As technology evolves, the way we travel continues to change as fat, if not, faster than any other industry. We can fly further, get around easier, communicate with everyone around us and those back home immediately and we have better access to real time information.
This access to real time information has changed the way we exchange money around the world. In the past, market information would take a long time to transmit around the world. Getting the most up to date currency rates would never be something you could rely on.
With exchange rates moving up and down every hour, knowing what the exchange rate is in real time not only puts your mind at ease it can save you hundreds of dollars and if used in the right way earn you hundreds of dollars too.
Why Exchange Rates Matter
The value of a country’s currency affects everyone regardless if they are citizens or not. Tourists and expats are also limited or strengthened by the local value of currency in comparison of the currency of their home country (view this exchange rate story as example).
A recent example: The numbers of tourists from Latin America coming to Florida tourism numbers decreased in the last few years due to the devaluation of several Latin American currencies. Tourists from Brazil and Argentina were unable to travel and shop as much in Florida because the values of their currencies weakened against the United States Dollar and therefore the cost of travel to Florida and the USA increased significantly. It was much more affordable to stick with domestic travel.
Anytime a meaningful adjustment (5+%) in currency exchange occurs, individuals around the world are affected.
While many of these adjustments cannot be predicted (and shouldn’t be), the other way the foreign exchange process has changed is in the fee structure.
Ways You Can Exchange Currency
On site: when you arrive at your destination airport, you can bring cash from your departing country and exchange currency there and then. The only issue… currency exchange booths charge massive fees.
Before you leave: more and more banks are offering a prepaid card loaded with your destination’s currency to use at the ATM’s. The fees on this vary but it’s usually cheaper than option 1.
Withdraw from ATM’s: this is how I do get foreign currency usually, but wow, the bank fees can be ridiculous!
Western Union: pure robbery at its finest and horrible customer service.
Use a third party currency exchange service: this is the best choice if you’re changing a lot of money ($1000+) and more and more solutions are on the market.
Third Party Currency Exchange Revolution
As mentioned above, the bank fees and charges for the solutions above are not fun. Especially when the rate is a commission proportional to the amount of money you are exchanging.
With these third party currency exchange services helping, the competition to create better, faster and safer ways to transfer cash overseas back and forth is heating up.
This is great as it reduces the cost of FOREX and enables those who want to travel to do so by exchanging money when exchange rates are affordable, you can even hedge your money easier this way. And of course, those who are exchanging thousands at a time whether that’s because of travel, emergency or you might even be moving country.
Signing Up To Several Services To Get The Best Rate
Most of these currency exchange rate service providers offer solutions for lots of currencies. However they all work in a slightly different way and there may be more local solutions that are able to offer a better exchange rate.
For example: Send Money Australia is great for those looking to exchange NZD as it looks up all of the local bank exchange rates in real time so you can at least compare the rates they have and the ones you’re using to get a n idea if you are being ripped off or not.
I also like the idea of two individuals transferring money directly via a third party (essentially an escrow). This is great in that the less effort the third party needs to do, the less fees need to be charged to generate profit.
Finishing It up
Every year technology will continue to evolve the way we travel in addition to continuing to refine things we have always done for decades. In theory, exchanging currency will become more efficient in terms of cost and speed.
The closest thing I can compare these currency providers too is the search engines that browse all the different flights and prices available within certain parameters you suggest.
The way we change and move money around the world has changed dramatically in the last decade. The reason for this is that some new companies in the FOREX game have gained major traction.