[Report] "I Earned 100 Won Today"... Myeongdong and Namdaemun Currency Exchange Offices Devastated by COVID-19

About 10 of 30 Currency Exchange Offices in Myeongdong and Namdaemun Close
Severe Impact Due to Low Fees of 0.1~0.15% in High-Volume Structure
Face Challenges from Contactless Exchange and Economic Downturn Even After COVID-19

The metal door of a currency exchange office near Namdaemun Market in Namchang-dong, Jung-gu, Seoul is firmly closed.

[Asia Economy Reporter Song Seung-seop] "There was only one customer today. Since I exchanged just 106,000 won, I earned 100 won all day."

On the afternoon of the 17th, at Namdaemun Market in Seoul, currency exchanger Kang Jin-san (68, pseudonym) sighed deeply as he repeatedly opened and closed an almost empty cash register. Kang said, "Most currency exchange booths in the area have closed since the outbreak of the novel coronavirus infection (COVID-19)," adding, "I come out every day to make a living, but I feel hopeless as I don't think I can hold on much longer."

10 out of 20 Currency Exchange Booths Closed, 8 More Considering Closure

Due to the impact of COVID-19, currency exchange booths in Myeongdong and Namdaemun, Korea’s representative foreign tourist spots, have been devastated. Last year, the THAAD (Terminal High Altitude Area Defense) incident caused Chinese tourists to stop coming, which hit the sales of these exchange booths. Some closed, but most remained open. However, this year is different. With COVID-19 cutting off not only Chinese but also other foreign tourists, most currency exchange booths have closed one after another. Domestic customers have also stopped visiting due to the economic downturn and the spread of online and non-face-to-face currency exchange services.

Kang said, "Since starting the currency exchange business in the 1990s, I have overcome many adversities, but this year I have no way to endure helplessly," revealing, "I have exhausted all my savings to pay rent and maintain the store, and recently took on a debt of 20 million won."

A street of private currency exchange offices in Myeongdong, Jung-gu, Seoul. With the Embassy of China in Korea directly in front, it used to be a bustling area, but it has become quiet due to a decrease in visitors caused by COVID-19.

On that day, after visiting 20 currency exchange booths near Myeongdong and Namdaemun, 10 were already closed, and 8 were seriously considering closure or had put their stores up for sale. Considering there are about 30 exchange booths in the area, more than half have closed or plan to close.

The situation in Myeongdong, where private currency exchange booths are most densely concentrated, was particularly severe. Many small exchange booths located on the outskirts of Myeongdong were closed. Cheon Ji-woon (55, pseudonym), who operates a small exchange booth on the central street of Myeongdong, sighed, "I ran a restaurant in Myeongdong, but business was so bad that I opened a currency exchange booth two years ago, but the streets of Myeongdong have become deserted," adding, "The number of customers over the past few months can be counted on one hand." Park Myung-seo (67, pseudonym), who started a currency exchange booth on the second floor of Myeongdong-daero in May, lamented, "I thought COVID-19 would end quickly back then," and said, "I started hoping for a recovery in tourist demand as the rent decreased, but I only lost money."

Severe Impact Due to Low Commission Structure of 0.1~0.15%

A currency exchange near Namdaemun with the lights off.

In fact, with foreign tourists disappearing, currency exchangers’ sales are almost zero. Typically, currency exchangers earn a commission of 0.1~0.15% of the exchanged amount. It is a typical low-margin, high-volume business model, so when visitors decrease, losses inevitably increase. The merchants met that day unanimously said, when asked how much customers have decreased, "It's not a matter of a few percent or a few customers decreasing, but rather there are none at all."

Choi Moon-soo (44, pseudonym), who operates a currency exchange booth in front of the Chinese Embassy in Korea, urgently shouted at the reporter to "move aside quickly" when a customer requesting currency exchange visited during the interview. It was the first customer he had welcomed in about a week.

The currency exchange industry experienced a boom in 2015 when domestic customers were allowed to use private currency exchange booths and 'holy places' with low commissions appeared on internet communities. However, with financial companies and big tech firms introducing currency exchange services via ATMs, drive-thru, and delivery methods, the number of people visiting offline stores has sharply declined.

Professor Sung Tae-yoon of Yonsei University’s Department of Economics explained, "In the past, payment tasks, especially currency exchange, were often done face-to-face, but nowadays, there are more convenient ways to handle currency exchange," adding, "The merit of visiting scattered currency exchange booths has greatly diminished." He also added, "While COVID-19 has had an impact, we need to consider the overall changes as well."

Merchants considering closure are also worried about how to sustain their livelihoods in the future. Since the overall real economy has declined, starting new businesses or finding jobs has become difficult. Currency exchanger Ahn Jung-seok (54, pseudonym) said, "Monthly rents for currency exchange booths in this neighborhood range from 2 million to 9 million won, and many have put their stores up for sale without asking for key money," revealing, "I heard most are barely surviving by working part-time at restaurants, doing deliveries, or manual labor."

This content was produced with the assistance of AI translation services.