Local Cambios Are Not Your Friend

I did a CapitalOne ATM withdrawal at an exchange of 19.224 both yesterday and today. Noticed that Intercam is advertising an exchange of 18.30. Now, realistically, CapOne has to be making some money on the deal (or, why do it?). Most internet exchange websites are currently posting 18.90 as a current. What is the deal??

Vandre wrote:What is the deal??

My guess is that Cap1 is working in real time and the others are using the quote of a service that "closed" Friday evening, like Yahoo saying it is 18.9092 as if the money markets are static on the weekend.

CapOne has many other revenue streams including the exchange float. Intercam is making a higher percentage because of fewer revenue streams as well as the lag in posted bank exchange rates.

Intercam charges commission to get your money, therefore you get a lower exchange rate.

Exchange rates are just like any other commodity or product.  Cash exchanges are always less than bank or ATM rates.  18.3 is a good rate for exchanging cash today.

I get the best rate from my ATM, bar none.  The rate is usually .2 points below the bank exchange rate.  In other words, my bank makes .2 on the exchange.  They can afford to charge so little because they have other streams of revenue, as I stated before.

The midmarket rate right now is 18.9--I like 18.7 as an exchange rate better.

Banks and exchange houses have cash buy and sell rates. It has always been that way. They buy your currency at a lower rate and sell to those who need it at a higher rate. These days few if any banks will exchange cash due to hassles with anti-money laundering rules. And I believe exchange house must report cash transactions above a certain amount.

I found where I have my accounts that rather than wiring money to, for example to my Actinver Bank Account, I could get almost the spot rate by wiring it directly to my Actinver Brokerage account.

And yes I report my balances to the US Treasury Dept. as required each year. No big deal as the balances are not that big.

Clete wrote:Banks and exchange houses have cash buy and sell rates. It has always been that way. They buy your currency at a lower rate and sell to those who need it at a higher rate. These days few if any banks will exchange cash due to hassles with anti-money laundering rules. And I believe exchange house must report cash transactions above a certain amount.

FYI,

Here, on the Riviera Maya, USD's are in wide circulation.  Most banks will change foreign currencies to pesos.  There are Casa de Cambio's everywhere.

Pemex, OXXO's, all the major supermarkets, and almost every other business will take USD's or most other major currencies.   By law they must post their tipo de cambio rate.

This area of Mexico could very well be the money laundering capital of the country.

I keep USD's on hand for grocery shopping.  You usually can get better than ATM or inter-bank rates for using USD's instead of pesos to pay for your food.  I got 19.87 at Soriana yesterday.  Hopefully WalMart will compete and offer 20 soon.

USD's are in wide circulation at every coastal resort town I have ever been to in Mexico.