If I google the exchange rate from one currency to another, it shows a much better rate than what I would get in a bureau de change for the same amount of money. Why are these two rates so different?

Question

If I google the exchange rate from one currency to another, it shows a much better rate than what I would get in a bureau de change for the same amount of money. Why are these two rates so different?

In: 24

Answer 1

Currency futures are the news/internet rates. They are mostly for large banks trading millions of dollars with each other. They’re kind of like wholesale rates.

Currency exchange places are boutique businesses that trade less volume at higher prices (or in this case spreads.

Think of some tourist trinket, from the factory it might sell for $0.25 each but at a hotel or airport gift shop it’s going to cost $7.99 and if you scout around you might find a bigger store selling them for $3.99. Currency exchanges are similar, but we publish the factory prices globally.