When you are exchanging foreign currency there are two primary factors to consider – the conversion rates and how easy it is to exchange your money. Naturally, you want to get the best rates possible with the least amount of effort. And no, that is not being lazy. It is called being smart. You are only being lazy if you exchange your money in the first place you find.
This short guide will help you get a better understanding of how exchanging currency works online vs in-store. Both have some advantages over the other and there are some specific situations to consider. Let’s go over the pros and cons of both methods and reach a conclusion on which one is better.
Will You Get Better Rates Online Or In-Store?
More than likely, this is what you are most interested in. To give you a simplified answer – you will usually get better conversion rates online. There are a few reasons for why this is. First, you will have access to a currency converter, so you can always know the exact rates. You can learn more about the benefits of using an online currency converter with a 5-minute read, so we won’t go into it here.
In the money exchange game, knowledge is power. By exchanging currency online, you have many more options to choose from than with physical stores. That is a general advantage of the internet. What would usually take you 3 hours by car is only a click away.
You can easily search for online exchanges with the best rates and lowest commissions. If you have the time to spend do go to multiple exchange stores, you could find similar rates, but it would take you days. Even then, it is not a guarantee. Exchanging currency online is always a 5-minute process.
There is a simple reason why physical stores have higher commissions – they have more overhead. They need to pay for their store location, utilities, and other costs associated with running a store. So, they cover it by charging higher commissions. While it is understandable, there is no reason for you to be the one to pay for their store.
Plus, money exchange stores are usually located close to travel locations. Many people leave exchanging money for the last minute before a trip. Exchange stores bank on you need to exchange your money now, so they can jack up their prices. Online exchanges know that competition is just around the corner, so they need to give you good rates and low commissions.
One Exception
There is an exception to the rule. And that is when you are exchanging a large amount of money. What a large amount means will vary from store to store, but, more than likely, upwards of $5000 in whatever currency will be considered a large sum.
In such a case, you may get better rates by going to a physical store and negotiating. Of course, that means that you need to be a good negotiator. The store owners do this for a living, so it won’t be easy. But, it is possible to get better rates if you are exchanging a large sum and have a way with words.
Benefits Of Exchanging Currency Online
Besides getting better rates, there are other benefits to using an online exchange. One is obvious – you can exchange money from anywhere at any time. So, no traffic and no work hours. Just take out your smartphone and you’re ready to go.
Then, you have the reason why professionals use online exchanges – a variety of available currencies. Physical stores will usually have the 7 major and minor currencies: USD, EUR, GBP, JPY, AUD, CAD, and CHF. And we do mean usually.
When you go to a physical store, you could easily be able to exchange only three or four. When it comes to more exotic currencies, it will be hard to buy or sell them in regular stores. There are always specialized stores that carry exotic currencies, but they are few and far between. On the other hand, you can always find whatever you need by going online.
Whether you need to buy Danish krone or sell Indian rupee, you will have no issue if you go online. Availability is extremely important if you are dealing in foreign currencies, and so is the timing. By the time you find a traditional exchange store that carries the currencies you need and get to it, the market rates may have already changed.
Finally, most online exchange stores provide delivery services. So, you just sit at home and wait for the money to arrive. Until you have the money in your hands, you don’t have to worry about it.
This may not seem like a big deal, but you would be surprised. Until you have traveled around town with a large sum of money in your pocket, you don’t know how stressful it can be. Ideally, you wouldn’t have to worry about such things, but that is not the world we live in. Better to be safe than sorry and receive your money right at your doorstep.
If you want to simplify it, you can think of the three main benefits of online currency exchange like this – better rates, availability, and simplicity. However, there are some advantages to doing an in-store exchange, so let’s go over them.
Benefits Of Going To A Money Changer
By now, you may think that there are no benefits to in-store exchanges. Well, are you there? Well… kind of. We have already discussed one – you can get better rates if you are exchanging a large sum and are a smooth negotiator.
The other one is that you get the money straight away. So, if you are in a rush and need to exchange money quickly, going to a physical store is probably your only option. However, that what physical stores count on. You can be sure they will charge you for those quick services.
Which One Is Better For Exchanging Currencies?
We don’t believe this is much of a discussion – in almost all cases, exchanging currency online is the better option. Unless you are in a tremendous hurry, there is no reason to go to a physical store. Online you can find better rates, lower commissions, and have the money delivered to your doorstep. It all depends on your currency exchange needs.
