[Report] "One Customer a Day, 100 Won Profit" Myeongdong and Namdaemun Currency Exchange Offices Devastated by COVID-19 (Comprehensive)

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] "Today, I only had one customer. Since I exchanged just 106,000 won, I earned only 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 (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, major foreign tourist spots in Korea, 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 continued operating. However, this year is different. With COVID-19, not only Chinese but other foreign tourists have stopped coming, leading most exchange booths to close 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.

A street of private currency exchange offices in Myeongdong, Jung-gu, Seoul. It used to be crowded with people as the Embassy of China in Korea is located right in front, but it has become quiet due to a decrease in visitors caused by COVID-19.

Kang said, "Since starting the currency exchange business in the 1990s, I have overcome many hardships, but this year I have no way to endure helplessly," revealing, "I have exhausted all my emergency funds on rent and store maintenance and recently took on a debt of 20 million won." Two nearby exchange booths have already closed or put their leases up for rent.

On this 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 rent. 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, is particularly severe. Many small exchange booths located on the outskirts of Myeongdong were locked. Cheon Ji-woon (55, pseudonym), who operates a small exchange booth on Myeongdong's central street, said, "I opened a currency exchange booth two years ago after running a restaurant in Myeongdong because business was so bad, but the streets of Myeongdong have become deserted," sighing, "The number of customers over several 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, said, "I thought COVID-19 would end quickly back then," adding, "I started hoping for a recovery in tourist demand with reduced rent, 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.

With foreign tourists disappearing, currency exchangers' sales are almost zero. Typically, exchangers earn a commission of 0.1~0.15% of the exchanged amount. This is a typical low-margin, high-volume business model, so when visitors decrease, losses are inevitable. The merchants met on this day unanimously said, when asked how much customers have decreased, "It's not a matter of a few percent or a few customers; there are basically none."

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 came to exchange money during the interview. It was the first customer in about a week. Choi said, "The rent here is relatively cheap, but dozens of customers need to come daily just to barely cover the rent," adding, "Since the spread of COVID-19 began in March, the average number of visitors has been 0 to 5, so it's impossible to maintain the business."

The currency exchange industry experienced a boom in 2015 when domestic customers were allowed to use private exchange booths and 'holy places' with low commissions appeared on internet communities. However, with financial companies and big tech firms introducing ATM, drive-thru, and delivery currency exchange services, the number of people visiting offline stores has sharply declined. KEB Hana Bank's non-face-to-face currency exchange service increased from 9% to 25% in one year through collaboration with Toss last year, and in May, fintech startups were granted online currency exchange business licenses, allowing customers to receive foreign currency at their preferred time and place.

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 exchange booths has greatly diminished." He 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. The overall real economy has declined, making new startups or employment difficult. Ahn Jung-seok (54, pseudonym), who owns a roughly 10-pyeong (approx. 33 square meters) currency exchange booth, said, "Monthly rent for exchange booths in this neighborhood ranges from 2 million to 9 million won, and many have put their stores up for rent without asking for key money," adding, "But since the stores don't rent out, most people 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.