A
bureau de change (
British EnglishBritish English, or English , is the broad term used to distinguish the forms of the English language used in the United Kingdom from forms used elsewhere...
) or
currency exchange (
American EnglishAmerican English is a set of dialects of the English language used mostly in the United States. Approximately two-thirds of the world's native speakers of English live in the United States....
) is a business whose customers exchange one
currencyIn economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
for another. Although originally
FrenchFrench is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...
, the term
bureau de change is widely used throughout Europe, and European travellers can usually easily identify these facilities when in other European countries. It is also common to find a sign saying "Exchange" or "Change." Since the adoption of the
euroThe euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
, many exchange offices incorporate its logotype prominently on their
signageSignage is any kind of visual graphics created to display information to a particular audience. This is typically manifested in the form of wayfinding information in places such as streets or inside/outside of buildings.-History:...
.
The term
bureau de change is not used in the United States. Instead, the terms used in the United States and in Canadian English are
currency exchange and sometimes
money exchange, sometimes with various additions such as
foreign,
desk,
office,
counter,
service, etc., for example
foreign currency exchange office.
Location
A bureau de change is often located at a
bankA bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
, at a travel agent,
airportAn airport is a location where aircraft such as fixed-wing aircraft, helicopters, and blimps take off and land. Aircraft may be stored or maintained at an airport...
, main railway station or large
storesRetail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
— namely, anywhere there is likely to be a market for people needing to convert currency. So they are particularly prominent at travel hubs, although currency can be exchanged in many other ways both legally and illegally in other venues. Some of the major players include Travelex and
HSBCHSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...
.
Business model
A bureau de change makes profit and competes by manipulating two variables: the
exchange rateIn finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...
they use to calculate transactions, and an explicit
commissionThe payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold...
for their service.
The exchange rates charged at bureaux are generally related to the
spot priceThe spot price or spot rate of a commodity, a security or a currency is the price that is quoted for immediate settlement . Spot settlement is normally one or two business days from trade date...
s available for large interbank transactions, and are adjusted to guarantee a profit. The rate at which a bureau will buy currency differs from that at which it will sell it; for every currency it trades both will be on display, generally in the shop window.
So the bureau sells at a lower rate from that at which it buys. For example a UK bureau may sell
€The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
1.40 for
£The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
1 but buy €1.60 for £1.
So if the spot price on a particular day is €1.50 to £1, in theory £2 will buy €3, but in practice this would be hard if not impossible for average consumers to get. If the bureau de change buys £1 from a consumer for €1.40 and then sells £1 for €1.60, the 20¢ difference makes a profit.
This business model can be upset by a currency run when there are far more buyers than sellers (or vice versa) because they feel a particular currency is overvalued or undervalued and becomes
not worth a Continental.
The business may also charge a commission on the transaction. Commission is generally charged as a
percentageIn mathematics, a percentage is a way of expressing a number as a fraction of 100 . It is often denoted using the percent sign, “%”, or the abbreviation “pct”. For example, 45% is equal to 45/100, or 0.45.Percentages are used to express how large/small one quantity is, relative to another quantity...
of the amount to be exchanged, or a fixed fee, or both. Some bureaux advertise themselves as commission-free, which mathematically just means they further load their offered exchange rates. As an additional complexity some bureaux offer special deals for customers returning unspent foreign currency after a holiday. Bureaux de change rarely buy or sell coins, but sometimes will at a higher profit margin, justifying this by the higher cost of storage and shipping compared with
banknoteA banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
s.
Consumer issues
Changing money at a bureau is often more expensive than withdrawing it from a Automatic teller machine at one's destination or paying directly by
debitA debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
or
credit cardA credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
, , but this varies depending on the card issuer and the type of account. Some people may feel uncomfortable carrying a lot of cash and so prefer to use a card.
Some may also prefer to hold foreign currency rather than change it back if they are expecting to return to where it is used. Companies that frequently send employees abroad may essentially act as their own exchange by reimbursing their employees in the local currency and holding the foreign currency. If exchange rates are relatively stable, the fees charged by a bureau may exceed any likely fluctuation and it also makes the company's
accountancyAccountancy is the process of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in...
easier.
In the alternate, some prefer to buy their currency before they travel, either just for a sense of security, or because they speculate the exchange rate is better at that time than it will be when they make their trip.
In 2002 many bureaux reported substantial reductions in profit due to the replacement of many European currencies with the Euro.
Illegal activity
In countries where currency exchange is lightly regulated, bureaux de change can be used as
front organizationA front organization is any entity set up by and controlled by another organization, such as intelligence agencies, organized crime groups, banned organizations, religious or political groups, advocacy groups, or corporations...
s for money laundering. Customers bring legally obtained money and receive illegally obtained money in return. The owners of the bureau may indeed be themselves customers to launder their own money.
In popular culture
- The 1994 news parody The Day Today
The Day Today is a surreal British parody of television current affairs programmes, broadcast in 1994, and created by the comedians Armando Iannucci and Chris Morris. It is an adaptation of the radio programme On the Hour, which was broadcast on BBC Radio 4 between 1991 and 1992...
featured a spoof soap operaA soap opera, sometimes called "soap" for short, is an ongoing, episodic work of dramatic fiction presented in serial format on radio or as television programming. The name soap opera stems from the original dramatic serials broadcast on radio that had soap manufacturers, such as Procter & Gamble,...
called The Bureau, set in "a 'high class' bureau de change" and run by soap-opera stereotypes (the arrogant boss, the gay man, etc.). In the programme, the soap supposedly replaced the BBC Nine O'Clock NewsThe BBC Nine O'Clock News was the flagship BBC News programme launched on 14 September 1970, which ran until 15 October 2000, when it was controversially moved to BBC News at Ten....
, and then failed to attract large audiences leading to it being sent on tour on the back of a lorry-Transport:* Lorry or truck, a large motor vehicle* Lorry, or a Mine car in USA: an open gondola with a tipping trough* Lorry , a horse-drawn low-loading trolley-In fiction:...
. This was a reference to the failed BBC soap opera EldoradoEldorado was a British soap opera that ran for only one year, from 6 July 1992 to 9 July 1993. Set in Coín on the Costa Del Sol and based around the lives of British and European expats, the BBC hoped it would be as successful as EastEnders and replicate some of the sunshine and glamour of imported...
.
- The folk-spoof group "Flight of the Conchords
Flight of the Conchords are a New Zealand-based comedy duo composed of Bret McKenzie and Jemaine Clement. The duo's comedy and music became the basis of a BBC radio series and then an American television series, which premiered in 2007 on HBO, also called Flight of the Conchords.They were named...
" makes an oblique reference to bureaux de change in the song "Foux Da Fa Fa", in which one of the band members sings the line "Bonjour mon petit bureau de change" to one of the women in the park.
- In the "Mutants" episode of the British comedy television show The Mighty Boosh
The Mighty Boosh is a British comedy troupe featuring comedians Julian Barratt and Noel Fielding. Developed from three stage shows and a six episode radio series, it has since spawned a total of twenty television episodes for BBC Three and two live tours of the UK, as well as two live shows in the...
, Zooniverse owner Dixon Bainbridge can be heard saying to Bob Fossil, "If you can keep your stupid mouth shut, you can stand to make one hundred Euros, maybe more depending on the bureau de change here."