Money changers feeling the pinch
Fifty-seven money changers closed their operations over the past year, while the volume of money exchanged plunged by over 600%, mainly due to the country's suspension of cross-border travel amid the Covid-19 pandemic.
According to data from the Bank of Thailand, as of May 2021, the total number of money exchange service providers was 2,334, declining from 2,365 in December last year and 2,391 in May last year.
Over the past year or so after the Covid-19 outbreak emerged in Thailand in March 2020, 57 money changers shut down.
As of May this year, service providers located in the North stood at 132, down by 18 from 150 in May last year. The number in the Central region dropped by 17 to 1,031 as of May this year, in the South they declined by 17 to 1,117, while in the Northeast the number fell by five to 54.
As of February this year, total buying volume in this business segment was US$167.91 million, while selling volume was $168.89 million.
Transactions significantly declined from December last year when buying volume was $204.66 million and selling volume was $209.22 million.
Meanwhile, both the buying and selling volume in February last year was equal at around $1.25 billion each.
The buying volume plunged 648% in February this year, on a year-on-year basis, while selling was down 642%.
Piya Tantivachayanon, president of SuperRich Currency Exchange (1965), a leading local money changer, said the number of money changers would continue to decline, especially those in a vulnerable condition and carrying high operational costs.
Related rental fee is the one core operating expenses for the business, particularly in communities and tourist areas.
Even though the Phuket sandbox scheme is a good project and will encourage business activities in Phuket, it is not sufficient to bring money exchange transactions back to normal.
"The country's reopening, especially Bangkok, is a key factor to help boost money exchange transactions to a significant level. However, the business operation for the post Covid-19 period will not be the same as before the outbreak," he said.
Besides the heavy impact of the outbreak with no foreign travellers, digital disruption is another key factor causing higher competition in this service segment. Demand for the digital currency service has been rising before the outbreak in line with the digital era.
Mr Piya said his firm has been transforming to a digital platform service in preparation for operations for the post-Covid era and in the longer term in line with the changing demands of consumers. SuperRich has closed physical branches to control operating costs and targets to keep 17-18 outlets, down from 49 branches before the pandemic.