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Comment by amac | Hacker News Reader

> The answer does depend on where I am heading but in my experience I usually exchange a smaller amount at home (at a forex company) and later just withdraw from ATMs.

Yeah, that's what I do. I'm guessing you use online banking for the forex? or a dedicated forex company e.g travelex?

I've never worked in forex or know anyone in the business - I never knew it was regulated. I assume that kiosk type fx companies use banks for money supply? and that as long as currencies were pegged to global rates, they are free to charge whatever they like?

I do hear lots of people complaining about commission, that's what I guess makes Bitcoin and other P2P options attractive. Maybe forex companies have little choice, especially when you consider airport rents, staff etc.

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>Maybe forex companies have little choice, especially when you consider airport rents, staff etc.

Yes, it's an incredibly profitable business and the airports know it. Airports will generally offer a monopoly or duopoly license to operate there and charge rent in the millions for busy terminals. That cost gets passed on to the consumer.

I'm not sure what you mean by commission, but ignoring cash management costs, operators can do the conversion close enough to free as to not matter. For example, I can currently sell/buy EURUSD at a rate of 1.35080/1.35085 respectively. That's an effective cost from mid of 0.002%. Anything wider than that is gross margin.

I tend to go to a forex company if I have to exchange before traveling, never do online banking for it.

I am not sure how the kiosk fx companies does it but moving money around is always a risk. They can probably charge as much as they like but it is that they cannot exchange unlimited amounts, you have to show how you got the money when exchanging above certain amounts. Money laundering regulations makes up a lot of the regulations in that area.

Bitcoin fluctuates wildly though, and exchanging it is hardly quick for the most part. Both brings down the attractiveness for consumer-type fx.

Airports are location monopolies so companies that operate at them have no incentive to provide cheaper services. They can operate at a healthy (for them) margin and the customers will still come. There is a reason those airport sandwiches are expensive!

> Airports are location monopolies so companies that operate at them have no incentive to provide cheaper services. They can operate at a healthy (for them) margin and the customers will still come. There is a reason those airport sandwiches are expensive!

Yeah, airports are going to only get busier right so they'd be a good bet for startups (and more monopolies) in this regard.

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