12 money changers in Singapore close as Covid-19 takes toll on industry

There are about 270 money changers in Singapore.
There are about 270 money changers in Singapore.PHOTO: TAMIL MURASU

SINGAPORE (TAMIL MURASU) - Every day when Mr Oli Mohamed opens his money-changing shop in Bukit Batok, he hopes to at least make enough to cover expenses.

But there are days when he does not even have a single transaction.

On other days, he sees a gross profit of just $2 or $3.

Mr Oli, 47, the owner of Straits Foreign Exchange and who has been in the industry for the past decade, said: "This is after sitting behind the counter for an entire day from 10am till 9pm."

Money changers in Singapore have been badly hit by the Covid-19 pandemic with business at a standstill for most.

Mr Oli, who is also secretary of the Money Changers Association (Singapore), said: "Those operating within the malls are bound by contractual obligations to operate during the stipulated time. We have no choice but to sit with no customers to attend to."

He added that almost 70 per cent of money changers are small businesses and cash flow has become tight as expenses are still significant.

The association comprises around 200 money changers and was established in 2003.

A former civil servant, Mr Oli said: "We thought we had to write off 2020 but had hope for 2021. However, with the borders remaining largely closed and no movement of people between countries, many of us have been losing hope for the future."

Clients include local residents who travel overseas, foreign tourists visiting Singapore, business people and entities, and migrant workers sending money to their families.

Mr Mohamed Farook, 77, of Arcade Money Changers, said this is the worst situation he has experienced in the 42 years he has been in the trade.

"Since the time I set up my business, I have always seen it grow and expand. Even during the many financial crises and the Sars (Severe Acute Respiratory Syndrome) situation in 2003, we were not affected to this extent for such a prolonged period," he noted.

"Because our borders were still open and people were still travelling."

His company employs about 10 staff and he has not downsized, thanks to the Jobs Support Scheme (JSS).

Money changers have been receiving Tier 1 support from the JSS which provides them up to 50 per cent wage support till March.


Money changers have been receiving Tier 1 support from the JSS which provides them up to 50 per cent wage support. PHOTO: TAMIL MURASU

"The future of the industry after that is unimaginable. There are already many who have been closing as they could not survive these difficult times," he said.

A Monetary Authority of Singapore (MAS) spokesman said since April last year, 37 money changers had temporarily ceased their business, and five of them have since resumed operations.

Twelve money changers have closed permanently.

There are about 270 money changers in Singapore.

Days leading up to Chinese New Year are usually profitable for most of them. That is when they see a huge increase in transactions which drives the demand for some foreign currencies.

Singapore residents who go overseas during the long break, foreign workers from Malaysia and China who return home for the celebrations and those who want to send money back to their families contribute to the demand.

Mr R. Prabhakaran, 60, who runs Ishwarya Money Changer at Tampines Mall, said:

"We look forward to this period every year. It is in November when business starts to peak, as the school holidays start.

"December is also a good month as foreigners come here for their holidays. And it continues till Chinese New Year."

A money changer at The Arcade in Raffles Place, who declined to be named, said his business used to sell up to RM6 million (S$2 million) a day but is now struggling to even sell RM30,000 a day.

He used to supply the Malaysian currency to other money changers around the island.

No means to manage expenses

Money changers are also very concerned about their rental and manpower costs.

Mr Mohamed Rafik, 50, who has been in the industry for the past 25 years, said his business plunged by 99 per cent and many operators cannot even cover their rental expenses.

"Borders need to open. Only then will money changers be able to bounce back," he added.

"That is why we were waiting for the vaccination (roll-out). We are looking forward to the day when those who are vaccinated can travel without the need for quarantine or to be on stay-home notice."

Upholding family business

Many of the money changers here have been operating as a family business.

Ms Nadzimah Haleem, 27, has been working in her father's business of 40 years after graduating as an economic and finance graduate from the University of London.

She said they used to have 400 to 500 customers daily but now have fewer than 20.

She said: "We do not know whether we can sustain this in the long run. There are no plans for us now. We are just waiting for travel restrictions to ease. With this situation, I don't think it's very soon.

"But I try to stay positive."

Future of the trade

With consumers becoming more receptive to e-wallets, multi-currency cards and digital cash, the traditional business model of money changers runs the risk of becoming obsolete.


The traditional business model of money changers runs the risk of becoming obsolete. PHOTO: TAMIL MURASU

Mr Barakath Ali, executive committee member of the money changers association and chairman of the Remittance Association (Singapore), said they have played an important role in the progress of the nation "as a tourism and financial hub".

The 43-year-old, who is also the director of Aramex International Exchange, added: "However, the era is changing and there is a greater push for digital transformation in this industry, which requires the mostly brick-and-mortar companies to embark on technological transformation."

He believes money changers need to take this time to start exploring digital solutions and also provide add-on services or expand their product offerings such as foreign SIM cards.

"Online products and services are becoming more advanced yet simpler to adopt. Customers are starting to embrace them as it gives them more confidence, enhanced security and there is a push by the Government to go digital," he noted.

For a young money changer like Mr Muhammad Rilwan, 28, providing services online is the way to go. He is trying to create a mobile app to allow customers to book their currencies and make deliveries.

Mr Rilwan, who runs his father's 12 Hrs Money Exchanger, said: "It is a good time for us to work on such ideas."

• An earlier version of this article was published in Tamil Murasu.