Money changers exchange currencies at fluctuating rates, either independently or employed. They profit from service fees or selling currency when its value increases. They are often approached by tourists and offer more favorable rates than bureaus, but this practice is often illegal.
A money changer is a person who exchanges one currency for another. The rates at which these transactions take place are often in flux and are determined by international exchange rates. A person may act in this capacity independently or may be employed. Your income may come from service fees or fluctuating exchange rates.
There are several reasons why a person might need to exchange one type of currency for another. The main reason tends to be international tourism. When a person travels to another country, the currency system is often different. This prevents a person from being able to use their native currency while in the foreign country. A money changer is an individual whose services can remedy this situation.
An exchanger accepts one type of currency from his client and exchanges it for an equivalent amount in another currency. In some cases, exchanger fees will be fixed. More commonly, however, trading fees are determined by current international exchange rates. They are constantly in flux, and the most accurate exchangers often operate using electronic systems that can respond to exchange rates from one minute to the next. Currency traders with less access to innovative tools are more likely to have a rate that remains fixed throughout the day.
There are two main ways in which an exchanger can profit from the services he provides. Some will charge service fees on every trade they make. Others reap their profits mainly by selling the currency they earned when its value increases. For example, if a currency trader receives $100 USD ($100 USD) today, it may be possible to exchange it to get 7000 South African Rand. If, however, he keeps this $100 till tomorrow, he can get 8000 rand for it.
In many countries, tourists are approached by money changers in places where these individuals perceive that they are likely to encounter foreigners. They are usually prepared to transact on the spot and will accept multiple types of major currency. The exchange rates offered by these individuals are often more tourist-friendly than what they would receive if they walked into a bureau. This practice is often so widespread and open that many people are unaware that this is often considered black market trading and is often illegal.
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