[SINGAPORE] For 50 years, The Arcade at Raffles Place has bustled with holidaymakers and retail speculators seeking the best exchange rates to convert their Singapore dollars to foreign currencies.
The money changer trade in the area grew out of Singapore’s status as one of the world’s busiest maritime ports. Many sailors who arrived at the then-nearby port needed to swap cash and change money for their next destination.
Over time, Singaporeans bound for holidays and work overseas also came to discover that Raffles Place is where to get the best exchange rates for physical cash.
These days, the scene is noticeably quieter as its more than 20 money changers grapple with the trend of customers switching from physical cash to digital multi-currency wallets.
Not only are e-wallets such as Revolut and YouTrip a more convenient and safer alternative to carrying physical foreign currencies offered by local money changers, they also pitch better exchange rates as a main selling point.
Thamim A K, the manager of Crown Exchange on level two of The Arcade, said: “Business has been slow for the past few months. Traffic is very slow in The Arcade. Not many people are coming to buy currency.”
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Thamim, who has been in the money changing business for 30 years, said the whole industry has been hit, adding that the past two months have been particularly bad, but was unsure of the reasons.
Mohamed Imran, a 22-year-old working at VS Money Changer at the building’s entrance, cited the digital disruption. “These days there’s YouTrip and (other digital alternatives), so there’re fewer customers, not much crowd like before. A few years back, there were a lot of customers. But everything can be done online now.”
One such alternative is Revolut, which offers financial services including currency exchange and multi-currency accounts.
Ashley Thomas, the head of strategy and operations at Revolut Singapore, said: “The way people travel and manage their money is evolving rapidly, with a clear shift towards digital-first financial solutions that offer greater transparency, flexibility and convenience.”
Revolut Singapore said it had a steady year-on-year growth over the past year. In July, the number of users engaging with its exchange and card payment services rose by 34 per cent while the value of overseas card payments in foreign currencies grew by a similar 35 per cent.
YouTrip too is enjoying a surge in users and transactions. Its user base doubled over the past two years, with transaction volume growing in tandem.
VS Money Changer’s Mohamed conceded that online exchange rates are better than those offered by money changers, and this will continue to chip away at the industry.
Still, he personally prefers using cash to convert currency, for its reliability, since it is not subject to digital glitches and downtime.
Douglas Yap, the director of Fiat Money Changer on level 2 of The Arcade, echoed this, saying: “Cash is king”. He believes there will always be customers who want to exchange cash without having to open an account. “Whatever you want, we can change what you want,” he said.
The consensus among his peers at The Arcade is that money changers will not disappear anytime soon.
The reliability of cash and the need for cash – especially for tipping, paying small vendors or travelling to countries with less developed digital payment infrastructures – will ensure that.